Arcos Dorados Holdings Inc (NYSE:ARCO) Q3 2019 Earnings Conference Call - Final Transcript

Nov 13, 2019 • 10:00 am ET

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Arcos Dorados Holdings Inc (NYSE:ARCO) Q3 2019 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Ladies and gentlemen, at this time, we'll begin the question-and-answer session. [Operator Instructions] Our first question today comes from Robert Ford from Bank of America Merrill Lynch. Please go ahead with your question.

Analyst
Robert Ford

Thank you. Congrats on the quarter and thanks for taking my question. Marcelo, can you talk a little bit about the current functionality of the app and how you expect that to evolve over the near date immediate term place?

Executive
Marcelo Rabach

Okay. Hello. Good morning, Bob, and thank you very much for joining us today. Well, as you may recall we launched the app at the end of 2016 and we were focused at the very end in expanding the reach of the app. And finally, these days we have more than 30 million downloads of the app, which is obviously one of the most downloaded apps in the food category in the food sector in the region. And what we are doing is, it's an evolution in the functionalities of the app. So for example, at the very beginning, we were putting in the app basically offers and coupons for everyone, for everybody in order to redeem those at our restaurants.

Nowadays, we are in the second step of this process where we can use the communication through the app segmenting our offers to different groups of customers. By doing this, we are able to improve both the redemption rates and at the same time, we are increasing our check and the gross margin related with those offers and those coupons. This is just an example of how we are leveraging customer data to create value, obviously through better quality transactions and generating higher returns.

This is I think starts the beginning of a journey that has a lot of potential. I think that having more than 30 million people in the region with our app in their smartphones, it's a huge and strategic asset for us and we will leverage that for sure in the near future. So as of today, that's what I can say to you, but we are working on bringing more news around the app.

Analyst
Robert Ford

Marcelo, just a follow up on that. When you think about things like in-app purchases or delivery, what do you anticipate that sort of functionality to be added to the app?

Executive
Marcelo Rabach

Yeah. For example, in the case of delivery, we already launched a couple of pilots and we are not already there. We didn't got the code, but that's one of the functionalities that we want to add to the app in order to have the opportunity to offer delivery through our app. I think that maybe we will have some news around that in the coming months.

Analyst
Robert Ford

Fair enough. Thank you.

Executive
Marcelo Rabach

You are very welcome.

Operator
Operator

[Operator Instructions] Our next question comes from Robert Schweich. Please go ahead with your question.

Analyst
Robert Schweich

Good morning. Could you tell us what kind of arrangement you've made with McDonald's for the fees to be paid them

in the future compared to this