ARCO - Arcos Dorados is called a restaurant stock standout by Bank of America

Bank of America boosted its rating on Arcos Dorados Holdings (NYSE:ARCO) to Buy from Neutral as it pointed to stronger than expected sales for the restaurant operator, impressive gross margin recovery and better operating leverage on leaner cost structures. The BofA analyst team said ARCO is emerging from COVID with greater store automation, more direct to consumer marketing and increasingly sophisticated customer relationship management tools even as it sustains much higher levels of sales via delivery. Crucially, ARCO's gross margins are noted to be recovering much more rapidly than earlier forecast, despite food inflation and varying degrees of consumer disposable income pressure. "While higher delivery sales are a factor, improvements also reflect price segmentation efforts, as leaders move toward smarter promotional strategies that increasingly optimize for consumer elasticity. Revenue management efforts ensure accessible pricing, while adapting ingredients, adding or removing menu items, bundling offers, reducing sizing, and raising price in

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Arcos Dorados is called a restaurant stock standout by Bank of America