After a big bounce early in 2012, investors are taking a step back and realizing that conditions in the emerging markets may not be as bad as feared, but they're not as good as hoped. As a direct play on consumer spending in Latin America and Brazil, Arcos Dorados (Nasdaq:ARCO) shows a lot of that push-pull dynamic. Although underlying growth is OK and growth potential is significant, investors have gotten spooked by slower sales growth and greater cost impacts than originally feared.
Squeezed at the End of the Year
Arcos Dorados had a challenging fourth quarter that came in a little short of initial expectations. Revenue rose more than 10% as reported (about 16% in constant currency), on a better than 11% same-store sales growth number.
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