- Global comparable sales have grown 9% for the year and over
30% since 2019
- Systemwide sales* to loyalty members were over $20 billion for the full year and over
$6 billion for the quarter across 50
loyalty markets, with full year growth of more than 45% over prior
year
CHICAGO, Feb. 5, 2024
/PRNewswire/ -- McDonald's Corporation today announced results for
the fourth quarter and year ended December
31, 2023.
"Our global comparable sales growth of 9% for the year is a
testament to the tremendous dedication of the entire McDonald's
System," said McDonald's President and CEO Chris Kempczinski. "Strong execution of our
Accelerating the Arches strategy has driven over 30%
comparable sales growth since 2019 as our talented crew members,
and the industry's best franchisees and suppliers have demonstrated
proven agility with a relentless focus on the customer. By evolving
the way we work across the System, we remain confident in the
resilience of our business amid macro challenges that will persist
in 2024."
Fourth quarter financial performance:
- Global comparable sales increased 3.4%, reflecting positive
comparable sales across all segments:
-
- International Operated Markets segment increased 4.4%
-
- International Developmental Licensed Markets segment increased
0.7%, reflecting the impact of the war in the Middle East
- Consolidated revenues increased 8% (6% in constant
currencies).
- Systemwide sales increased 6% (5% in constant currencies).
- Consolidated operating income increased 8% (6% in constant
currencies). Results included $72
million of pre-tax charges related to the write-off of
impaired software no longer in use and $66
million of pre-tax charges related to the Company's
Accelerating the Arches growth strategy, including
restructuring costs associated with Accelerating the
Organization. Excluding these charges, consolidated operating
income increased 14% (11% in constant currencies).**
- Diluted earnings per share was $2.80, an increase of 8% (5% in constant
currencies). Excluding the charges described above of $0.15 per share, diluted earnings per share was
$2.95, an increase of 14% (11% in
constant currencies).**
Full year financial performance:
- Global comparable sales increased 9.0%, reflecting strong
comparable sales across all segments:
-
- International Operated Markets segment increased 9.2%
-
- International Developmental Licensed Markets segment increased
9.4%
- Consolidated revenues increased 10% (10% in constant
currencies).
1
- Systemwide sales increased 10% (10% in constant
currencies).
- Consolidated operating income increased 24% (24% in constant
currencies). Results included $290
million of pre-tax charges related to the Company's
Accelerating the Arches growth strategy, including
restructuring costs associated with Accelerating the
Organization and $72 million of
pre-tax charges related to the write-off of impaired software no
longer in use. Excluding these current year charges, as well as
prior year pre-tax charges and gains of $1.3
billion and $271 million,
respectively, consolidated operating income increased 16% (16% in
constant currencies).**
- Diluted earnings per share was $11.56, an increase of 39% (38% in constant
currencies). Excluding the current year charges described above of
$0.38 per share, diluted earnings per
share was $11.94, an increase of 18%
(18% in constant currencies) when also excluding prior year charges
and gains and a tax settlement.**
*Refer to page 5 for a definition of Systemwide sales.
**Refer to pages 3 and 4 for additional details on our results for
the fourth quarter and full year 2023 and 2022.
2
COMPARABLE
SALES
|
|
|
Increase/(Decrease)
|
|
|
Quarters Ended December 31,
|
|
|
2023
|
|
2022
|
U.S.
|
|
4.3 %
|
|
10.3 %
|
International Operated
Markets
|
|
4.4
|
|
12.6
|
International
Developmental Licensed Markets & Corporate
|
|
0.7
|
|
16.5
|
Total
|
|
3.4 %
|
|
12.6 %
|
- U.S.: Comparable sales results benefited from strong
average check growth driven by strategic menu price increases.
Successful restaurant level execution, effective menu and marketing
campaigns and continued digital and delivery growth contributed to
strong comparable sales results.
- International Operated Markets: Segment performance was
driven by strong comparable sales in most markets, led by the U.K.,
Germany and Canada, partly offset by negative comparable
sales in France.
- International Developmental Licensed Markets: Segment
performance reflected positive comparable sales in all geographic
regions, with the exception of the Middle
East, which was impacted by the war in the region.
KEY FINANCIAL METRICS -
CONSOLIDATED
Dollars in millions,
except per share data
|
|
|
Quarters Ended December 31,
|
|
Years Ended December 31,
|
|
|
2023
|
|
2022
|
|
Inc/ (Dec)
|
|
|
Inc/ (Dec)
Excluding
Currency
Translation
|
|
|
2023
|
|
2022
|
|
Inc/ (Dec)
|
|
|
Inc/ (Dec)
Excluding
Currency
Translation
|
|
Revenues
|
|
$
6,406.2
|
|
$
5,926.5
|
|
8
|
%
|
|
6
|
%
|
|
$ 25,493.7
|
|
$ 23,182.6
|
|
10
|
%
|
|
10
|
%
|
Operating
income
|
|
2,801.9
|
|
2,582.7
|
|
8
|
|
|
6
|
|
|
11,646.7
|
|
9,371.0
|
|
24
|
|
|
24
|
|
Net income
|
|
2,039.0
|
|
1,903.4
|
|
7
|
|
|
5
|
|
|
8,468.8
|
|
6,177.4
|
|
37
|
|
|
37
|
|
Earnings per
share-diluted
|
|
$ 2.80
|
|
$ 2.59
|
|
8
|
%
|
|
5
|
%
|
|
$ 11.56
|
|
$
8.33
|
|
39
|
%
|
|
38
|
%
|
Results for 2023 included the following:
- Pre-tax charges of $72 million,
or $0.08 per share, for the quarter
and the year, related to the write-off of impaired software no
longer in use
- Pre-tax charges of $66 million,
or $0.07 per share, for the quarter
and $290 million, or $0.30 per share, for the year, related to the
Company's Accelerating the Arches growth strategy, including
restructuring costs associated with its internal effort to
modernize ways of working (Accelerating the
Organization)
Results for 2022 included the following:
- Pre-tax charges of $1,281
million, or $1.44 per share,
for the year, related to the sale of the Company's business in
Russia
- Pre-tax gain of $271 million, or
$0.40 per share, for the year,
related to the Company's sale of its Dynamic Yield business
- $537 million, or $0.73 per share, for the year, of nonoperating
expense related to the settlement of a tax audit in France
Excluding the above items, results for both periods reflected
strong operating performance driven primarily by higher
sales-driven Franchised margins.
3
NET INCOME AND EARNINGS
PER SHARE-DILUTED RECONCILIATION
Dollars in millions,
except per share data
|
|
Quarters Ended December 31,
|
|
|
Net Income
|
|
Earnings per share - diluted
|
|
2023
|
|
2022
|
|
Inc/ (Dec)
|
|
|
Inc/ (Dec)
Excluding
Currency
Translation
|
|
|
2023
|
|
2022
|
|
Inc/ (Dec)
|
|
|
Inc/ (Dec)
Excluding
Currency
Translation
|
|
GAAP
|
$ 2,039.0
|
|
$ 1,903.4
|
|
7
|
%
|
|
5
|
%
|
|
$ 2.80
|
|
$ 2.59
|
|
8
|
%
|
|
5
|
%
|
(Gains)/charges
|
105.6
|
|
—
|
|
|
|
|
|
|
|
0.15
|
|
—
|
|
|
|
|
|
|
Tax
Settlement
|
—
|
|
—
|
|
|
|
|
|
|
|
—
|
|
—
|
|
|
|
|
|
|
Non-GAAP
|
$ 2,144.6
|
|
$ 1,903.4
|
|
13
|
%
|
|
10
|
%
|
|
$ 2.95
|
|
$ 2.59
|
|
14
|
%
|
|
11
|
%
|
|
|
|
Years Ended December 31,
|
|
Net Income
|
|
Earnings per share - diluted
|
|
2023
|
|
2022
|
|
Inc/ (Dec)
|
|
|
Inc/ (Dec)
Excluding
Currency
Translation
|
|
|
2023
|
|
2022
|
|
Inc/ (Dec)
|
|
|
Inc/ (Dec)
Excluding
Currency
Translation
|
|
GAAP
|
$ 8,468.8
|
|
$ 6,177.4
|
|
37
|
%
|
|
37
|
%
|
|
$
11.56
|
|
$ 8.33
|
|
39
|
%
|
|
38
|
%
|
(Gains)/charges
|
273.7
|
|
770.7
|
|
|
|
|
|
|
|
0.38
|
|
1.04
|
|
|
|
|
|
|
Tax
Settlement
|
—
|
|
537.2
|
|
|
|
|
|
|
|
—
|
|
0.73
|
|
|
|
|
|
|
Non-GAAP
|
$ 8,742.5
|
|
$ 7,485.3
|
|
17
|
%
|
|
16
|
%
|
|
$
11.94
|
|
$
10.10
|
|
18
|
%
|
|
18
|
%
|
4
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 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. Restaurants in Russia were treated as permanently closed as
of April 1, 2022 and therefore
excluded from the calculation of comparable sales and comparable
guest counts beginning in the second quarter of 2022. 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. Beginning in the first
quarter of 2023, McDonald's excluded results from Argentina and Lebanon in the calculation of comparable sales
due to hyperinflation (Venezuela
continues to be excluded). 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
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-operated and franchised restaurants. Systemwide sales to
loyalty members are measured across approximately 50 markets with
loyalty programs globally. Full year Systemwide sales to loyalty
members represents an annual aggregation of quarterly 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-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 and year ended
December 31, 2023.
McDonald's Corporation will broadcast its investor earnings
conference call live over the Internet at 7:30 a.m. (Central Time) on February 5,
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 February 5, 2024. The Company
undertakes no obligation to update such forward-looking statements,
except as may otherwise be required by law.
5
McDONALD'S
CORPORATION
CONDENSED
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
|
Dollars and shares in millions, except per share
data
|
|
|
|
|
|
Quarters Ended December 31,
|
2023
|
|
2022
|
|
Inc/ (Dec)
|
Revenues
|
|
|
|
|
|
|
|
Sales by
Company-operated restaurants
|
$ 2,474.1
|
|
$ 2,208.4
|
|
$
265.7
|
|
12 %
|
Revenues from
franchised restaurants
|
3,868.6
|
|
3,645.0
|
|
223.6
|
|
6
|
Other
revenues
|
63.5
|
|
73.1
|
|
(9.6)
|
|
(13)
|
|
|
|
|
|
|
|
|
TOTAL
REVENUES
|
6,406.2
|
|
5,926.5
|
|
479.7
|
|
8
|
|
|
|
|
|
|
|
|
Operating costs and
expenses
|
|
|
|
|
|
|
|
Company-operated
restaurant expenses
|
2,074.7
|
|
1,872.3
|
|
202.4
|
|
11
|
Franchised
restaurants-occupancy expenses
|
632.7
|
|
588.1
|
|
44.6
|
|
8
|
Other restaurant
expenses
|
44.6
|
|
57.2
|
|
(12.6)
|
|
(22)
|
Selling,
general & administrative expenses
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
90.5
|
|
91.4
|
|
(0.9)
|
|
(1)
|
Other
|
730.9
|
|
720.3
|
|
10.6
|
|
1
|
Other operating
(income) expense, net
|
30.9
|
|
14.5
|
|
16.4
|
|
n/m
|
Total operating costs
and expenses
|
3,604.3
|
|
3,343.8
|
|
260.5
|
|
8
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
2,801.9
|
|
2,582.7
|
|
219.2
|
|
8
|
|
|
|
|
|
|
|
|
Interest
expense
|
360.2
|
|
322.9
|
|
37.3
|
|
12
|
Nonoperating (income)
expense, net
|
(73.3)
|
|
(79.1)
|
|
5.8
|
|
(7)
|
|
|
|
|
|
|
|
|
Income before provision
for income taxes
|
2,515.0
|
|
2,338.9
|
|
176.1
|
|
8
|
Provision for income
taxes
|
476.0
|
|
435.5
|
|
40.5
|
|
9
|
|
|
|
|
|
|
|
|
NET INCOME
|
$ 2,039.0
|
|
$ 1,903.4
|
|
$
135.6
|
|
7 %
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE-DILUTED
|
$
2.80
|
|
$
2.59
|
|
$
0.21
|
|
8 %
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding-diluted
|
727.8
|
|
736.0
|
|
(8.2)
|
|
(1) %
|
6
McDONALD'S
CORPORATION
CONDENSED
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
|
Dollars and shares in millions, except per share
data
|
|
|
|
|
|
Years Ended December 31,
|
2023
|
|
2022
|
|
Inc/ (Dec)
|
Revenues
|
|
|
|
|
|
|
|
Sales by
Company-operated restaurants
|
$ 9,741.6
|
|
$ 8,748.4
|
|
$
993.2
|
|
11 %
|
Revenues from
franchised restaurants
|
15,436.5
|
|
14,105.8
|
|
1,330.7
|
|
9
|
Other
revenues
|
315.6
|
|
328.4
|
|
(12.8)
|
|
(4)
|
|
|
|
|
|
|
|
|
TOTAL
REVENUES
|
25,493.7
|
|
23,182.6
|
|
2,311.1
|
|
10
|
|
|
|
|
|
|
|
|
Operating costs and
expenses
|
|
|
|
|
|
|
|
Company-operated
restaurant expenses
|
8,224.1
|
|
7,380.9
|
|
843.2
|
|
11
|
Franchised
restaurants-occupancy expenses
|
2,474.6
|
|
2,349.7
|
|
124.9
|
|
5
|
Other restaurant
expenses
|
232.5
|
|
244.8
|
|
(12.3)
|
|
(5)
|
Selling,
general & administrative expenses
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
381.7
|
|
370.4
|
|
11.3
|
|
3
|
Other
|
2,435.2
|
|
2,492.2
|
|
(57.0)
|
|
(2)
|
Other operating
(income) expense, net
|
98.9
|
|
973.6
|
|
(874.7)
|
|
(90)
|
Total operating costs
and expenses
|
13,847.0
|
|
13,811.6
|
|
35.4
|
|
—
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
11,646.7
|
|
9,371.0
|
|
2,275.7
|
|
24
|
|
|
|
|
|
|
|
|
Interest
expense
|
1,360.8
|
|
1,207.0
|
|
153.8
|
|
13
|
Nonoperating (income)
expense, net
|
(236.3)
|
|
338.6
|
|
(574.9)
|
|
n/m
|
|
|
|
|
|
|
|
|
Income before provision
for income taxes
|
10,522.2
|
|
7,825.4
|
|
2,696.8
|
|
34
|
Provision for income
taxes
|
2,053.4
|
|
1,648.0
|
|
405.4
|
|
25
|
|
|
|
|
|
|
|
|
NET INCOME
|
$ 8,468.8
|
|
$ 6,177.4
|
|
$ 2,291.4
|
|
37 %
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE-DILUTED
|
$
11.56
|
|
$
8.33
|
|
$
3.23
|
|
39 %
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding-diluted
|
732.3
|
|
741.3
|
|
(9.0)
|
|
(1) %
|
7
McDONALD'S
CORPORATION
CONDENSED
CONSOLIDATED BALANCE SHEET (UNAUDITED)
|
In millions
|
December
31,
|
2023
|
|
2022
|
Current
assets
|
|
|
|
|
Cash and
equivalents
|
|
$ 4,579.3
|
|
$ 2,583.8
|
Accounts and notes
receivable
|
|
2,488.0
|
|
2,115.0
|
Other current
assets
|
|
919.1
|
|
725.4
|
|
|
|
|
|
TOTAL CURRENT
ASSETS
|
|
7,986.4
|
|
5,424.2
|
|
|
|
|
|
TOTAL OTHER
ASSETS
|
|
9,738.4
|
|
8,672.1
|
|
|
|
|
|
LEASE RIGHT-OF-USE
ASSET, NET
|
|
13,514.4
|
|
12,565.7
|
|
|
|
|
|
NET PROPERTY AND
EQUIPMENT
|
|
24,907.6
|
|
23,773.6
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
56,146.8
|
|
$
50,435.6
|
|
|
|
|
|
TOTAL CURRENT
LIABILITIES
|
|
$ 6,859.0
|
|
$ 3,802.1
|
|
|
|
|
|
Long-term
debt
|
|
37,152.9
|
|
35,903.5
|
Long-term lease
liability
|
|
13,057.7
|
|
12,134.4
|
Other long-term
liabilities
|
|
2,103.0
|
|
2,601.5
|
Deferred income
taxes
|
|
1,680.9
|
|
1,997.5
|
|
|
|
|
|
TOTAL SHAREHOLDERS'
EQUITY (DEFICIT)
|
|
(4,706.7)
|
|
(6,003.4)
|
|
|
|
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY (DEFICIT)
|
|
$
56,146.8
|
|
$
50,435.6
|
8
McDONALD'S
CORPORATION
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
|
In millions
|
Years ended December
31,
|
2023
|
2022
|
Operating
activities
|
|
|
|
Net income
|
|
$
8,468.8
|
$
6,177.4
|
Changes in working
capital items
|
|
(108.0)
|
(644.6)
|
Other
|
|
1,251.1
|
1,853.9
|
|
|
|
|
CASH PROVIDED BY
OPERATIONS
|
|
9,611.9
|
7,386.7
|
|
|
|
|
Investing
activities
|
|
|
|
Capital
expenditures
|
|
(2,357.4)
|
(1,899.2)
|
Sales and purchases of
restaurant and other businesses and property sales
|
|
(151.0)
|
(322.2)
|
Other
|
|
(676.1)
|
(456.7)
|
|
|
|
|
CASH USED FOR INVESTING
ACTIVITIES
|
|
(3,184.5)
|
(2,678.1)
|
|
|
|
|
Financing
activities
|
|
|
|
Net short-term
borrowings and long-term financing issuances and
payments
|
|
2,992.8
|
1,197.6
|
Treasury stock
purchases
|
|
(3,054.3)
|
(3,896.0)
|
Common stock
dividends
|
|
(4,532.8)
|
(4,168.2)
|
Proceeds from stock
option exercises and other
|
|
220.2
|
286.4
|
|
|
|
|
CASH USED FOR FINANCING
ACTIVITIES
|
|
(4,374.1)
|
(6,580.2)
|
|
|
|
|
EFFECT OF EXCHANGE
RATES ON CASH AND EQUIVALENTS
|
|
(57.8)
|
(253.8)
|
|
|
|
|
CASH AND EQUIVALENTS
INCREASE (DECREASE)
|
|
1,995.5
|
(2,125.4)
|
|
|
|
|
Cash and equivalents at
beginning of year
|
|
2,583.8
|
4,709.2
|
|
|
|
|
CASH AND EQUIVALENTS AT
END OF YEAR
|
|
$
4,579.3
|
$
2,583.8
|
|
|
|
|
Supplemental cash flow
disclosures
|
|
|
|
Cash provided by
operations
|
|
$
9,611.9
|
$
7,386.7
|
Less: Capital
expenditures
|
|
(2,357.4)
|
(1,899.2)
|
|
|
|
|
FREE CASH
FLOW
|
|
$
7,254.5
|
$
5,487.5
|
9
View original
content:https://www.prnewswire.com/news-releases/mcdonalds-reports-fourth-quarter-and-full-year-2023-results-302052428.html
SOURCE McDonald's Corporation