Good morning and thank you for joining Arcos Dorados' third quarter 2026 earnings webcast. With us today are Luis Raganato, our Chief Executive Officer, and Mariano Tannenbaum, our Chief Financial Officer. Today's webcast, which is being recorded, will consist of prepared remarks from our leadership team, which will be accompanied by a slide presentation that is also available in the investor section of our website, ir.arcosdorados.com. To better follow the presentation, please note that you can set your view to full screen on the webcast platform. Additionally, you can submit your questions at any time during the presentation using the Q&A function on the bottom of the screen. After we conclude our opening remarks, we will answer your questions. Today's call will contain forward-looking statements, and I refer you to the forward-looking statements section of our earnings release and recent filings with the SEC. We assume no obligation to update or revise any forward looking statements to reflect new or changed events or circumstances In addition to reporting financial results in accordance with generally accepted accounting principles, we report certain non-GAAP financial results. Investors are encouraged to review the reconciliation of these non-GAAP financial results as compared with GAAP results, which can be found in today's earnings press release and conference call presentation, as well as the unaudited financial statements filed today with the SEC on Form 6-K. Following our customary format, today Luis will present the highlights of the third quarter's consolidated results. Then he will review the main marketing and digital activities during the quarter, as well as divisional revenue performance. Mariano will take you through consolidated and divisional profitability in addition to our main leverage metrics, restaurant growth, and capital expenditures. Luis will then provide some final thoughts before opening the call for questions. Luis, over to you.

Thank you, Dan. And good morning, everyone. A few weeks ago, we held our 2026 Investor Day. During the presentation, we talked about the keys to success of the last several years, demonstrating how we strengthened the brand captured significant market share, delivered strong revenue growth, and more than doubled U.S. dollar EBITDA from 2019 to 2025.

In other words, today we are operating at a very high level in the U.S. dollar industry. and some of the initiatives we expect to sustain long-term growth. Marketing and digital networking are strengths and connecting with guests when and where they want. Innovation and technology, providing new ways across the business. Development and supply chain, achieving higher returns from investment and building resilience into the operation. Our long-term growth objective to high single-digit annual total revenue growth High signal to low double-digit annual adjusted beta growth 527 to 2030 and 1.3 to 1.5 billion dollars in total capital expenditures Demonstrate the confidence we have in two countries for the future. Importantly, meeting these objectives implies additional creativity with a clear view of our capital allocation framework. First capital expenditures, which have significant growth opportunities in a highly underpenetrated region. In average investment per new restaurant, without sacrificing sales and cash flow, which is already improving first year. Together, with ongoing investments in modernization and technology, All of this makes discipline, high-aspect and return capex the best way to generate a healthy data machine. That is where we are today. We need data to adjust the data of just one point, which will help us support the business through all operating environments. In every year since 2022 versus the primary year, Fourth, shared purchases. Today, we are announcing that the report of the regulatory company's history. We believe our stock is undervalued at current levels. We are confident in our long-term plan to create an investment opportunity. are authorized to repurchase any canceled ARCO Dorado stock in the open market over the next six months. Let's turn to the results for the third quarter of 2020 to show that the business model continues to deliver in a demanding consumer market. and many more. That combination is what allows us to keep funding growth and, at the same time, return more capital. Total revenue reached $1.3 billion, up more than 11% versus the prior year of $1.3 billion. The total cost grew 15.5% driven by higher average costs. New restaurants also contributed. We ended the war with more than 100 additional locations compared with the years ago. and adjusted EBITDA excluding the net impact of the significant federal tax credit in Brazil last year. Market share and digital sales penetration remains strong and flat. Based on our research, the McDonald's brand continues to command the highest market share across the nearest competitor. Even with this significant advantage, we were still able to expand in 2026. The share, measured by guest traffic, was solid in all main markets during the pandemic. Panels grew by about 22% year-over-year and generated about two-thirds of total system-wide sales. These increased system-wide sales are now generated The sales reached loyalty program membership grew by 60% versus the prior year. With almost 38 million registered pay, this is the largest loyalty program in the region. Mobile order and pay, delivery, and loyalty sales all remain strong, strong. Thank you for joining us. These platforms offer guests a full meal at an attractive price point of less than $5 and a choice between a stronger presence in both categories. With the introduction of the documentary center, we will make this guest favorite available for a limited time, and this year was the best ever in terms of the install. We draw a broad affinity by joining the Academy on a region-wide program with the Mohandas. The program was built around the themed menu, which included the iconic chicken McNuggets with unique sauces, plus the crafted beverages. Finally, as the four-wheeled one-circuit comes to Latin America, Places in Mexico and Brazil, we introduced a Formula 1 meal across the region, a cheese sandwich, together with a collectible Formula 1 car, a crafted beverage in collaboration with Dredd, in partnership with Nestlé's Likada. Mexico and Argentina, their program, further directs sponsorships of popular locations. All sales grew 3.5% with positive momentum against traffic growth. Together, for Real, this drove US dollar revenue growth of more than 15%. What about flat and improvement versus the second quarter? Consumers in the division remain cautious so we can buy platforms like Panama, Martinique, and France again, deliver encouraging, comparable sales growth and a stronger Mexican business style health. and while Argentina and Venezuela continue to drive slash comparable sales growth, markets such as Colombia, Peru, and Europe are mass. Mariano, over to you. Thanks Luis. Good morning everyone. In our analysis today, we will make an adjustment to replying in the number of programs. The federal tax credit will recognize in Brazil the third quarter of last year's to that quarter's adjusted EBITDA. Including it would distort the year-over-year comparison. So when I refer to an excluding that effect, Adjusted EBITDA totaled $125.9 million, with a 9.5% consolidated burden on G&A, supporting consolidated margins in the period. Better pricing and product mix, together with productivity, places point improvement in food and vapor as a percentage of revenues. All three divisions give quarter of gross margin expansion. Thank you very much. Brazil's adjusted EBITDA grew by about 10% in U.S. dollars versus the prior year. Modest labor cost pressured it for most of the margin pressure compared with last year. Importantly, frame paper was lower than the percentage of revenue versus yields the right way. Nolet's adjusted EBITDA grew nearly double digits with margin expansion of 20 of our value platforms that protected margins with a challenging consumer environment. I encourage average check growth to rebuild Nolet's margin over time. In SLAT, improved form of paper performance was offset adjusted with the formatting about FLAT versus last year. As a result, adjusted with the growth remained in single digits versus last year. Net income attributable to Argos Dorados was $31.2 million excluding last year's federal tax credit. Net income grew almost 24% and net income margin expanded 20 basis points to 2.8 from our underlying operating performance and a lower income tax rate. and many more. As Luis explained, expanding our restaurants is a strategic decision we believe will generate long-term shareholder value. Next, we must maintain a strong balance sheet to grow consistently over those macroeconomic cycles. During the third quarter, More than $70 million in capital expenditures, bringing the total investment $56 million. These investments included 35 restaurant openings in a quarter and 70 openings through the first three quarters of the year. Returns on investment have continued to improve and the remaining restaurants have already been opened or are currently under reconstruction. We constantly seek to enhance our capital structure and debt profile. As of the end of September 5, and the net leverage ratio ended the third quarter at a healthy 1.8 times. We continue to be encouraged, which was more than $100 million higher in the last 12 months versus the prior comparable period. As I just showed you, our top two is why we are able to reinforce our belief in providing shareholders with additional sources of return, such as our trap rate of a shareholder purchase program. We follow a disciplined approach to capital allocation so that we can focus on what we do best, delivering great food and experiences to our long-term ambition, which here at our investor today reflects an average growth trend over the long-term single year. It is also macro-neutral, meaning it does not assume any specific economic activity. It is an ambitious but achievable level of growth, based on our confidence in the business model's ability to deliver attractive returns Highlighting the main points of the third quarter. Total revenue grew more than 11% in U.S. dollars with 5%. Underlying adjustability grew 9%, which will be better improving for the third consecutive quarter. reached $156 million about three times the level of a year ago. And with a healthy balance sheet, we're adding more capital to our shareholders. With that, I'll turn it back to Luis. We had a solid third quarter with normalizing comparable sales trends in Brazil, which included some encouraging baseline profitability in the quarter also performing well. Pricing high single digits versus last year. and we have some attractive marketing campaigns designed to take full advantage of the upcoming COVID-19 season. We have finalized our collaboration, strong partnerships throughout the year, and exciting product launches designed to drive comparable sales growth. All solutions of the technologies and continued cost discipline that we talked about during our investment day. It is with the development of a model that is improving returns on investments. Discipline in how we manage costs, which continues through the remainder for three consecutive quarters. And discipline in how we allocate capital, which today, and that we keep investing for growth. Thank you for joining today's call. I invite you to start the Q&A session. Now I'll take your questions. You can submit your questions using the Q&A function on the bottom of the screen. Please limit yourself to one or two questions so I can read, understand, and convey them to our listeners. Okay, let's get started with Eric from Santa Fe. Eric sends us actually four questions, and so we'll just take them one at a time. The first one will be for you, Luis. Okay. Could you elaborate a bit more on the trends throughout the quarter and perhaps how you're thinking about the sales trends as we head into Q26 and 2027? Thank you, Eric, for the question. Can we get a boost of the World Cup actions? The good news is that during the third quarter, we get a whirlwind. Your question has more inside of it, so it's more complex. So let me give you a little bit more detail about what happened during these three years. An increase in profit in the food service and the QSR segment. And in this context, our team was able to sustain positive consequences in that segment. At the same time, we were able to get this volume back. These results were a strategy that began last year. A strategy that was based on the land, tricky, just as a reminder, is our always unaffordable platform, reinforcing the commitment that we have to be the goal. We complemented this platform with initiatives that were built around the passion points of our guests. Activities like happiness campaigns, We also appealed to Gen Z guests with a K-pop-Vivian Hunters partnership. This initiative was a vertical relationship. We called that when these actions covered sandwiches, desserts, food. We also brought back the McFish Center, which worked as a limited time offer and had the best campaign ever in terms of units with the action that we were doing. Thank you very much. and I think it's worth highlighting how we grew because while the rest of the market relied more on heavy impact and gross margins, we took a more sustainable approach. We tried to balance price and volume and we saw that our growth was written by guests that came back to our restaurants and were smart, like I told you. So this is showing the effectiveness of our value proposition. So far in the fourth quarter, we are seeing that the tensions We believe that consumers will remain cautious with tight household budgets, but we believe that the recovery in the industry traffic scene is an encouraging signal. Relevant brand experiences, competitive value, and many more. In conclusion, across all channels, because our customers are on each channel, so that we can capture this demand profitably. Dan? Other questions related to Brazil? I'm going to read them together for you, Mariano. On the cost side, there's a lot in your store. Given that in Brazil we should have the reduction in working hours, how much should we think about this line, especially in 2027? And what are the main tools and initiatives that could offset such impacts? The tax reform in Brazil, the VAT system reduction, what could be the main impacts in terms of profitability when we look at it? and thanks, Eric, for the question. I'll start first discussing about peril in general and then I'll go to the specifics of Brazil that you're asking. In terms of peril efficiency, it has steadily improved before the pandemic. were our figures were and how they improved about 200 basis points in the last years. So that's the evolution over the last years. These were wages in three divisions. We are seeing that performance in three divisions and as a result, payroll expenses slightly increased. We continue to mitigate part of this pressure through productivity initiatives, improved scaling accuracy, and also using digital tools and natural resources. So while the payroll was heavy during the quarter, we believe the underlying dynamics are improving. That's worth mentioning. Thank you very much. with 2035. Now, I'm going to the specifics about labor reform in Brazil. Well, we are closely monitoring the change in legislation in Brazil. There were several changes in the last couple of years, and we will be able to determine its operational and financial interests. We have experience managing evolving labor environments, including learnings from other markets. We operate in those markets with the type of scale that Brazil is moving to, and we will implement the learnings The last question was related to the Brazilian tax reform and in this case The government is now adding regulations to the new tax reform laws. With that, I think it would be premature to quantify the scope and depth of the impact sector when we steal a lower VAT rate than was approved for the generalization. Additionally, this new VAT tax regime will apply to the entire economy, not just implemented over a transition period. That's important to mention, during which the current tax laws are fed over the course of several years. Thank you very much, Eric, again. Yeah, let me start with the specifics in Mexico. In terms of consumer spending, traffic was slightly down in this sector. and we saw also a highly competitive environment which maintained a stable performance during the water. The main focus was on the balance strategy that together with the strength of our program we were able to maintain our strong leadership position. In particular, in Mexico, especially in the retail sector, which has been impacted by continued pressure on consumer spending. However, the food service sector showed resilience. We managed to outperform both the food service sector and the QSR segment, even with positive comparables there. It was very important to maintain the focus on value, and combined with the strength, again, of the McDonald's brand, and investment marketing at least, not only maintain the value, and the VC share also. So, those market initiatives where they pick up the entrepreneurs may be coupled with our defining platform that makes our loyalty program digital sales are increasing in Mexico and the Mexican world. and, of course, all here to support top-line growth and keep it important for us in the long term. Sales mostly were driven by volume, with a notable improvement in gross margins. So, looking ahead, and in the ability to capture demand supported by a solid marketing plan and strong operational execution. Ben? Thanks, Luis. I'm going to start with you, Luis. A question from Jonathan Schwartz from IAM Brazil since the ban of online betting in late September. All right. Thank you, Jonathan, for the question. Now, so I would say that it's too early to say if the market or even the sector has had any impact. The banning was a provisional measure, and if this remains or becomes permanent, then we could see families resume a higher degree of spending on eating out and other forms of entertainment. She has a couple of questions that are very similar to questions from Alabama University at BTG25. So I'll go through the questions first. And we'll spend on the margin of look in Brazil, given the higher food costs and beef in particular, and also the new I think you've already addressed the work week piece, but maybe you want to get a little more Questions? Yes, I will go first for a margin update in Brazil, specifically about beef costs. That grew $6.2 million to $68.1 million in this quarter. This growth was supported by common stakes, new restaurant openings, better gross margin, leveraged income. Excluding the net federal tax credit, adjusted the margin contracted in the quarter by 60 basis expenses, mainly outside services and restaurant costs, that landed in this quarter and are not recurrent, together with slightly higher When we look at Brazil year-to-date, what we observe is that EBITDA margin remains 50 basis points above the prior year of performance of Brazil, thinking that, well, in particular, and probably It's, I think, important to highlight that this marks our fourth consecutive Brazilian We also benefited from lower GNA following last year's restructuring that we talked about. As Luis mentioned, the fourth quarter is off to a solid start in terms of sales. We continue to see food and paper and GNA as supportive. As I mentioned, as sales grow, We expect operating specific costs that we observed in the third quarter will not So, we are slightly positive for Brazil's margin for the next quarter and the beginning of next year. Going specifically about beef costs, It's true that in Brazil the BIF costs increased above inflation during 2026 by more favorable trends across other funding groups and discipline revenue management. So that's how we obtained a better food and labor during the last four quarters than we had back in 2025. Okay, thanks, Mariano. Melissa hasn't described, I think she's already, we've already answered all of it anyway. And the second part we'll come back to, Mariano. So, the first part is, can you provide some additional color on sales and max go through the third and fourth quarters about potential offsets to the minimum wage I make and shorter work per week max? What impacts do you anticipate from the tax reform in Mexico? So we'll stick with you, Mariano.

Perfect. In terms of the minimum wage hike in Mexico, we have seen these type of increases in the last four to five years. And if you see the performance that we had in Mexico over those years, In this respect, I don't think that we don't expect any material changes in our performance in Mexico given the hike in Thank you very much. We are able to mitigate the impact of the payroll cost line by increasing sales and other efficiencies that we are gaining in that market. We are very pleased with the performance in Mexico. In the last years, we don't expect any changes given the situation. In terms of the tax reform in Mexico, we are also not seeing any, you know, material impact on a consolidated level at the income tax line in Alcoa Dorados.

Okay, thanks, Daniel.

I'm going to move now to Thiago Wapolucci from Goldman Sachs. Thiago has a couple questions. Morning, gents. To what would you attribute your recent relative growth performance versus the number two operator in Brazil? That one's for you, please. All right.

Thank you, Thiago, for the question. I hope you do well.

First, I can't speak about the specific competitor's performance, especially since we don't know how they calculate comparable sales, and we don't have detailed financials to analyze.

What I can tell you is that we believe we're building sales in the best case value growth of the last eight quarters, while also expanding our gross margin. Evidence of this is that we have 2 to 1 market share, this market share even more. So what we observed was that most of our content is usually bad for margins and sustainable over time. And this is why we seek to do better thinking about it long term. Yeah. Thanks, Luis. And I have a second question for you, Daniel. Could you please comment directionally on how growth is possible? Perfect. Tiago, we have seen improvement in foreign paper. A meaningful reduction compared to last year. In this case, the division benefited from lower chicken, potatoes, and ice cream costs. In the case of slabs, also experienced a relevant decrease in food and paper costs. mainly because of inflation, and we also have a more profitable product in this case. And finally, Nona delivered further gains for the online currency environment in Mexico, Costa Rica, and Japan. Our pricing strategy is worth mentioning, remains disciplined and closely disciplined strategy aligned with inflation. We are seeing reduction in cost inputs and we are pleased with the results we have seen during this quarter. In terms of GNA, in the three divisions, the three divisions after the restructuring process have a leaner and more agile cost structure and is better aligned with agenda. In this case, as GNA could be affected by Thank you very much. Thanks, Mariana. We have another, and this is from Morgan, which we got from JP Morgan. How does the election in Brazil change the expectations for system-wide sales in Brazil for the next two years? And maybe we can get a conservative overall. Thank you for the question, Jorge. More than 40 years, almost 50 years in Brazil. And for us, we concentrate in the things that we can control, very focused on our business. Thank you very much. So we've reached the end of the Q&A session. Thanks again for your interest in Art with Dorados and for joining today's broadcast. Our next earnings call will be in the middle of March 2027. Until then, we wish you all a very happy holiday season and start of the new year.