OAK BROOK, Ill., April 22, 2016 /PRNewswire/ -- McDonald's
Corporation today announced results for the first quarter ended
March 31, 2016.
"McDonald's brand and business is built on offering delicious
food and beverages through unmatched convenience and compelling
value," said McDonald's President and Chief Executive Officer
Steve Easterbrook. "The turnaround
plan we announced last year is grounded in enhancing these critical
customer-driven elements, and I'm pleased to report that our
turnaround is taking hold. The ongoing investments we're making in
running great restaurants and delivering what matters most to our
customers are beginning to yield sustained positive results. For
the quarter, we generated higher sales, revenues and operating
income in constant currencies across all business segments."
First quarter results included:
- Global comparable sales increase of 6.2%, which benefited
from one additional day due to leap
year
- Consolidated revenues decrease of 1% (increase of 3% in
constant currencies)
- Consolidated operating income increase of 28% (33% in
constant currencies), partly due to comparison against the prior
year's strategic charges of $195
million
- Diluted earnings per share of $1.23, an increase of 46% (51% in constant
currencies), which includes comparison against the prior year's
strategic charges totaling $0.17 per
share. Excluding the impact of these strategic charges, earnings
per share in constant currencies increased $0.26 or 26%
- Return of $4.5 billion to
shareholders through share repurchases and dividends. This brings
the cumulative return to shareholders to $20.3 billion against our targeted return of
about $30 billion for the three-year
period ending 2016
In the U.S., first quarter comparable sales increased 5.4%,
fueled by the ongoing popularity of All Day Breakfast and the
introduction of McPick 2 - a branded national value platform.
Operating income for the quarter rose 15%, reflecting higher
sales-driven franchised margins, comparison against the prior
year's strategic charges, and higher gains from restaurant
refranchising. Looking ahead, the U.S. business remains focused on
finalizing its long-term value platform, investing in core menu
enhancements and simplifying restaurant operations to deliver an
outstanding customer experience.
Comparable sales for the International Lead segment increased
5.2% for the quarter, led by strong performance in the U.K.,
Australia and Canada as strong execution of core menu,
compelling value and convenience strategies continued to resonate
with consumers. First quarter operating income increased 12% (18%
in constant currencies), driven by higher franchised margin
dollars. The segment delivered strong results despite ongoing
economic and competitive headwinds in France and Germany.
In the High Growth segment, first quarter comparable sales
increased 3.6%, led by strong comparable sales performance in
China and positive performance
across various other markets, including Russia. In the Foundational markets, first
quarter comparable sales rose 11%, primarily due to sales recovery
in Japan. Quarterly operating
income increases for both segments reflected comparison against the
prior year's strategic charges and recovery from the prior year's
impact of the 2014 supplier issue - both of which negatively
impacted China and Japan's results in first quarter 2015.
Steve Easterbrook concluded,
"Last week, McDonald's came together for our biennial worldwide
convention to galvanize around the actions we're taking to be
recognized by our customers as a modern and progressive burger
company. I came away energized by the talented franchisees,
suppliers and employees from around the world who are working to
strengthen the fundamentals of running great restaurants to build
strong and sustainable momentum. While there is still work to be
done, we are on the right path to make even greater progress. I am
confident that our continued efforts will deliver meaningful
long-term value for all stakeholders into the future."
KEY HIGHLIGHTS -
CONSOLIDATED
Dollars in millions,
except per share data
|
|
Quarters Ended
March 31,
|
2016
|
|
|
2015
|
|
|
Inc/
(Dec)
|
|
|
Inc/ (Dec)
Excluding
Currency
Translation
|
Revenues
|
$
|
5,903.9
|
|
|
$
|
5,958.9
|
|
|
(1)%
|
|
|
3%
|
Operating
income
|
1,780.3
|
|
|
1,385.5
|
|
|
28
|
|
|
33
|
Net income
|
1,098.6
|
|
|
811.5
|
|
|
35
|
|
|
40
|
Earnings per
share-diluted
|
$
|
1.23
|
|
|
$
|
0.84
|
|
|
46%
|
|
|
51%
|
Results for the quarter benefited from stronger operating
performance and comparison to the prior year's strategic charges of
$195 million. Excluding the impact of
these strategic charges, earnings per share in constant currencies
increased $0.26 or 26%.
Foreign currency translation had a negative impact of
$0.04 on diluted earnings per share
for the quarter.
THE FOLLOWING DEFINITIONS APPLY TO THESE TERMS AS USED
THROUGHOUT THIS RELEASE
Comparable sales represent sales at all restaurants and
comparable guest counts represent the number of transactions 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 and
natural disasters. Comparable sales exclude the impact of currency
translation. Comparable sales are driven by changes in guest counts
and average check, which is affected by changes in pricing and
product mix. Typically, pricing has a greater impact on average
check than product mix. Management reviews the increase or decrease
in comparable sales and comparable guest counts compared with the
same period in the prior year to assess business trends.
Information in constant currency is 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 and bases incentive
compensation plans on these results because they believe this
better represents the Company's underlying business trends.
RELATED COMMUNICATIONS
This press release should be read in conjunction with Exhibit
99.2 in the Company's Form 8-K filing for supplemental information
related to the Company's results for the quarter ended
March 31, 2016.
McDonald's Corporation will broadcast its investor earnings
conference call live over the Internet at 10:00 a.m. (Central Time) on April 22, 2016. 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.
UPCOMING COMMUNICATIONS
McDonald's Annual Shareholders' Meeting will be webcast live on
May 26, 2016 at 9:00 a.m. (Central Time) on
www.investor.mcdonalds.com. An archived replay of the meeting will
be available for a limited time.
Steve Easterbrook, President and
Chief Executive Officer, and Kevin
Ozan, Chief Financial Officer, will participate in
Bernstein's Strategic Decisions Conference at 8:00 a.m. (Eastern Time) on June 1, 2016. This presentation will be webcast
live and available for replay for a limited time thereafter at
www.investor.mcdonalds.com.
McDonald's plans to release second quarter results before the
market opens on July 26, 2016 and
will host an investor webcast. This webcast will be broadcast live
and available for replay for a limited time thereafter at
www.investor.mcdonalds.com.
ABOUT McDONALD'S
McDonald's is the world's leading global foodservice retailer
with over 36,000 locations in over 100 countries. More than 80% of
McDonald's restaurants worldwide are owned and operated by
independent local business men and women.
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. The factors that could cause actual results to
differ materially from our expectations are detailed in the
Company's filings with the Securities and Exchange Commission, such
as its annual and quarterly reports and current reports on Form
8-K.
McDONALD'S
CORPORATION
CONDENSED
CONSOLIDATED STATEMENT OF INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars and shares
in millions, except per share data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended
March 31,
|
2016
|
|
2015
|
|
Inc/
(Dec)
|
Revenues
|
|
|
|
|
|
|
|
Sales by
Company-operated restaurants
|
$
|
3,753.5
|
|
|
$
|
3,914.1
|
|
|
$
|
(160.6)
|
|
|
(4)%
|
Revenues from
franchised restaurants
|
2,150.4
|
|
|
2,044.8
|
|
|
105.6
|
|
|
5
|
|
|
|
|
|
|
|
|
TOTAL
REVENUES
|
5,903.9
|
|
|
5,958.9
|
|
|
(55.0)
|
|
|
(1)
|
|
|
|
|
|
|
|
|
Operating costs and
expenses
|
|
|
|
|
|
|
|
Company-operated
restaurant expenses
|
3,175.3
|
|
|
3,354.3
|
|
|
(179.0)
|
|
|
(5)
|
Franchised
restaurants—occupancy expenses
|
415.1
|
|
|
403.6
|
|
|
11.5
|
|
|
3
|
Selling,
general & administrative expenses
|
578.0
|
|
|
582.8
|
|
|
(4.8)
|
|
|
(1)
|
Other operating
(income) expense, net
|
(44.8)
|
|
|
232.7
|
|
|
(277.5)
|
|
|
n/m
|
Total operating costs
and expenses
|
4,123.6
|
|
|
4,573.4
|
|
|
(449.8)
|
|
|
(10)
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
1,780.3
|
|
|
1,385.5
|
|
|
394.8
|
|
|
28
|
|
|
|
|
|
|
|
|
Interest
expense
|
218.3
|
|
|
147.3
|
|
|
71.0
|
|
|
48
|
Nonoperating (income)
expense, net
|
(14.4)
|
|
|
(15.9)
|
|
|
1.5
|
|
|
10
|
|
|
|
|
|
|
|
|
Income before
provision for income taxes
|
1,576.4
|
|
|
1,254.1
|
|
|
322.3
|
|
|
26
|
Provision for income
taxes
|
477.8
|
|
|
442.6
|
|
|
35.2
|
|
|
8
|
|
|
|
|
|
|
|
|
NET INCOME
|
$
|
1,098.6
|
|
|
$
|
811.5
|
|
|
$
|
287.1
|
|
|
35%
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE-DILUTED
|
$
|
1.23
|
|
|
$
|
0.84
|
|
|
$
|
0.39
|
|
|
46%
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding-diluted
|
894.9
|
|
|
965.5
|
|
|
(70.6)
|
|
|
(7)%
|
|
|
|
|
|
|
|
|
|
|
|
n/m Not
meaningful
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/mcdonalds-reports-first-quarter-2016-results-300255679.html
SOURCE McDonald's Corporation