- Global comparable sales have grown nearly 2% for the
quarter, marking 13 consecutive quarters of positive comparable
sales growth
- Consolidated revenues for the quarter were more than
$6 billion, an increase over prior
year of over 4% in constant currencies
- Systemwide sales* to loyalty members across 50 loyalty
markets were nearly $25 billion for
the trailing twelve-month period and over $6
billion for the quarter
CHICAGO, April 30,
2024 /PRNewswire/ -- McDonald's Corporation today
announced results for the first quarter ended March 31, 2024.
"Our global comparable sales growth in the first quarter
marks 13 consecutive quarters of
positive comparable sales growth with 30% growth over the last 4
years," said CEO Chris Kempczinski.
"As consumers are more discriminating with every dollar that they
spend, we will continue to earn their visits by delivering leading,
reliable, everyday value and outstanding execution in our
restaurants. As we look to the rest of 2024 and beyond, we remain
focused on leveraging the competitive advantages within our
Accelerating the Arches plan and growing QSR market share to
drive long-term growth."
First quarter financial performance:
- Global comparable sales increased 1.9%, reflecting positive
comparable sales in the U.S. and International Operated Markets
segment. Comparable sales in the International Developmental
Licensed Markets segment were slightly negative as the segment
continued to be impacted by the war in the Middle East:
-
- International Operated Markets segment increased 2.7%
-
- International Developmental Licensed Markets segment decreased
0.2%
- Consolidated revenues increased 5% (4% in constant
currencies).
- Systemwide sales increased 3% (3% in constant currencies).
- Consolidated operating income increased 8% (8% in constant
currencies). Results reflected pre-tax charges of $35 million and $180
million for the current year and prior year, respectively,
primarily related to restructuring charges associated with
Accelerating the Organization. Excluding these current
and prior year charges, consolidated operating income increased 2%
(2% in constant currencies).**
- Diluted earnings per share was $2.66, an increase of 9% (9% in constant
currencies). Excluding the current year charges described above of
$0.04 per share, diluted earnings per
share was $2.70, an increase of 2%
(2% in constant currencies) when also excluding prior year
charges.**
*Refer to page 3 for a
definition of Systemwide sales.
|
**Refer to page 2 for
additional details on charges for the first quarter 2024 and
2023.
|
1
|
|
COMPARABLE
SALES
|
|
|
Increase/(Decrease)
|
|
|
Quarters Ended March 31,
|
|
|
2024
|
|
2023
|
U.S.
|
|
2.5 %
|
|
12.6 %
|
International Operated
Markets
|
|
2.7
|
|
12.6
|
International
Developmental Licensed Markets
|
|
(0.2)
|
|
12.6
|
Total
|
|
1.9 %
|
|
12.6 %
|
- U.S.: Comparable sales results benefited from average
check growth driven by strategic menu price increases. Successful
restaurant level execution, effective marketing campaigns featuring
the core menu and continued digital and delivery growth contributed
to positive comparable sales results.
- International Operated Markets: Segment performance was
driven by positive comparable sales in most markets, led by the
U.K. and Germany, partly offset by
negative comparable sales in France.
- International Developmental Licensed Markets: The
continued impact of the war in the Middle
East more than offset positive comparable sales in
Japan, Latin America and Europe.
KEY FINANCIAL METRICS -
CONSOLIDATED
Dollars in millions,
except per share data
|
|
Quarters Ended March 31,
|
|
2024
|
|
2023
|
|
Inc/ (Dec)
|
|
|
Inc/ (Dec)
Excluding
Currency
Translation
|
|
Revenues
|
$
6,169
|
|
$
5,898
|
|
5
|
%
|
|
4
|
%
|
Operating
income
|
2,736
|
|
2,532
|
|
8
|
|
|
8
|
|
Net income
|
1,929
|
|
1,802
|
|
7
|
|
|
7
|
|
Earnings per
share-diluted
|
$ 2.66
|
|
$ 2.45
|
|
9
|
%
|
|
9
|
%
|
Results included pre-tax charges of $35
million, or $0.04 per share,
for the three months ended 2024 and $180
million, or $0.18 per share,
for the three months ended 2023, primarily related to restructuring
charges associated with the Company's internal effort to modernize
ways of working (Accelerating the Organization).
Excluding the above items, results reflected positive operating
performance driven primarily by higher sales-driven Franchised
margins, partly offset by higher Selling, general, and
administrative expenses.
NET INCOME AND EARNINGS
PER SHARE-DILUTED RECONCILIATION
Dollars in millions,
except per share data
|
|
Quarters Ended March 31,
|
|
|
Net Income
|
|
Earnings per share - diluted
|
|
2024
|
|
2023
|
|
Inc/ (Dec)
|
|
|
Inc/ (Dec)
Excluding
Currency
Translation
|
|
|
2024
|
|
2023
|
|
Inc/ (Dec)
|
|
|
Inc/ (Dec)
Excluding
Currency
Translation
|
|
GAAP
|
$
1,929
|
|
$
1,802
|
|
7
|
%
|
|
7
|
%
|
|
$ 2.66
|
|
$ 2.45
|
|
9
|
%
|
|
9
|
%
|
(Gains)/charges
|
27
|
|
134
|
|
|
|
|
|
|
|
0.04
|
|
0.18
|
|
|
|
|
|
|
Non-GAAP
|
$
1,957
|
|
$
1,936
|
|
1
|
%
|
|
1
|
%
|
|
$ 2.70
|
|
$ 2.63
|
|
2
|
%
|
|
2
|
%
|
2
THE FOLLOWING DEFINITIONS APPLY TO THESE TERMS AS USED
THROUGHOUT THIS RELEASE
Constant currency results exclude the effects of foreign
currency translation and are calculated by translating current year
results at prior year average exchange rates. Management reviews
and analyzes business results excluding the effect of foreign
currency translation, impairment and other charges and gains, as
well as material regulatory and other income tax impacts, and bases
incentive compensation plans on these results because the Company
believes this better represents underlying business trends.
Comparable sales and comparable guest counts are compared to the
same period in the prior year and represent sales and transactions,
respectively, at all restaurants, whether owned and operated by the
Company or by franchisees, in operation at least thirteen months
including those temporarily closed. Some of the reasons restaurants
may be temporarily closed include reimaging or remodeling,
rebuilding, road construction, natural disasters, pandemics and
acts of war, terrorism or other hostilities. Comparable sales
exclude the impact of currency translation and the sales of any
market considered hyperinflationary (generally identified as those
markets whose cumulative inflation rate over a three-year period
exceeds 100%), which management believes more accurately reflects
the underlying business trends. Comparable sales are driven by
changes in guest counts and average check, the latter of which is
affected by changes in pricing and product mix.
Systemwide sales include sales at all restaurants, whether owned
and operated by the Company or by franchisees. Systemwide sales to
loyalty members is comprised of all sales to customers who
self-identify as a loyalty member when transacting with both
Company-owned and operated and franchised restaurants. Systemwide
sales to loyalty members are measured across approximately 50
markets with loyalty programs. Systemwide sales to loyalty members
represents an aggregation of the prior four quarters of sales to
loyalty members active in the last 90 days. While franchised sales
are not recorded as revenues by the Company, management believes
the information is important in understanding the Company's
financial performance because these sales are the basis on which
the Company calculates and records franchised revenues and are
indicative of the financial health of the franchisee base. The
Company's revenues consist of sales by Company-owned and operated
restaurants and fees from franchised restaurants operated by
conventional franchisees, developmental licensees and affiliates.
Changes in Systemwide sales are primarily driven by comparable
sales and net restaurant unit expansion.
Free cash flow, defined as cash provided by operations less
capital expenditures, and free cash flow conversion rate, defined
as free cash flow divided by net income, are measures reviewed by
management in order to evaluate the Company's ability to convert
net profits into cash resources, after reinvesting in the core
business, that can be used to pursue opportunities to enhance
shareholder value.
RELATED COMMUNICATIONS
This press release should be read in conjunction with Exhibit
99.2 to the Company's Form 8-K filing for supplemental information
related to the Company's results for the quarter ended
March 31, 2024.
McDonald's Corporation will broadcast its investor earnings
conference call live over the Internet at 7:30 a.m. (Central Time) on April 30, 2024.
A link to the live webcast will be available at
www.investor.mcdonalds.com. There will also be an archived webcast
available for a limited time thereafter.
UPCOMING COMMUNICATIONS
For important news and information regarding McDonald's,
including the timing of future investor conferences and earnings
calls, visit the Investor Relations section of the Company's
Internet home page at www.investor.mcdonalds.com. McDonald's uses
this website as a primary channel for disclosing key information to
its investors, some of which may contain material and previously
non-public information.
ABOUT McDONALD'S
McDonald's is the world's leading global foodservice retailer
with over 40,000 locations in over 100 countries. Approximately 95%
of McDonald's restaurants worldwide are owned and operated by
independent local business owners.
FORWARD-LOOKING STATEMENTS
This release contains certain forward-looking statements, which
reflect management's expectations regarding future events and
operating performance and speak only as of the date hereof. These
forward-looking statements involve a number of risks and
uncertainties. Factors that could cause actual results to differ
materially from expectations are detailed in the Company's filings
with the Securities and Exchange Commission, including the risk
factors discussed in Exhibit 99.2 to the Company's Form 8-K filing
on April 30, 2024. The Company undertakes no obligation to
update such forward-looking statements, except as may otherwise be
required by law.
3
McDONALD'S
CORPORATION
CONDENSED
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
|
Dollars and shares in millions, except per share
data
|
|
|
|
|
|
Quarters Ended March 31,
|
2024
|
|
2023
|
|
Inc/ (Dec)
|
Revenues
|
|
|
|
|
|
|
|
Sales by Company-owned
and operated restaurants
|
$
2,355
|
|
$
2,224
|
|
$
131
|
|
6 %
|
Revenues from
franchised restaurants
|
3,723
|
|
3,588
|
|
135
|
|
4
|
Other
revenues
|
91
|
|
86
|
|
5
|
|
6
|
|
|
|
|
|
|
|
|
TOTAL
REVENUES
|
6,169
|
|
5,898
|
|
271
|
|
5
|
|
|
|
|
|
|
|
|
Operating costs and
expenses
|
|
|
|
|
|
|
|
Company-owned and
operated restaurant expenses
|
2,035
|
|
1,923
|
|
112
|
|
6
|
Franchised
restaurants-occupancy expenses
|
627
|
|
598
|
|
29
|
|
5
|
Other restaurant
expenses
|
68
|
|
63
|
|
5
|
|
8
|
Selling,
general & administrative expenses
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
99
|
|
99
|
|
—
|
|
—
|
Other
|
622
|
|
553
|
|
69
|
|
12
|
Other operating
(income) expense, net
|
(17)
|
|
129
|
|
(146)
|
|
n/m
|
Total operating costs
and expenses
|
3,433
|
|
3,365
|
|
68
|
|
2
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
2,736
|
|
2,532
|
|
204
|
|
8
|
|
|
|
|
|
|
|
|
Interest
expense
|
372
|
|
330
|
|
42
|
|
13
|
Nonoperating (income)
expense, net
|
(45)
|
|
(64)
|
|
19
|
|
(30)
|
|
|
|
|
|
|
|
|
Income before provision
for income taxes
|
2,409
|
|
2,267
|
|
142
|
|
6
|
Provision for income
taxes
|
479
|
|
465
|
|
14
|
|
3
|
|
|
|
|
|
|
|
|
NET INCOME
|
$
1,929
|
|
$
1,802
|
|
$
127
|
|
7 %
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE-DILUTED
|
$
2.66
|
|
$
2.45
|
|
$
0.21
|
|
9 %
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding-diluted
|
725.9
|
|
735.5
|
|
(9.6)
|
|
(1) %
|
4
View original
content:https://www.prnewswire.com/news-releases/mcdonalds-reports-first-quarter-2024-results-302130827.html
SOURCE McDonald's Corporation