OAK BROOK, Ill., Jan. 25, 2016 /PRNewswire/ -- McDonald's
Corporation today announced results for the fourth quarter and year
ended December 31, 2015.
"We took bold, urgent action in 2015 to reset the business and
position McDonald's to deliver sustained profitable growth," said
McDonald's President and Chief Executive Officer Steve Easterbrook. "We ended the year with
momentum, including positive comparable sales across all segments
for both the quarter and the year - a testament to the swift
changes we made and the early impact of our turnaround efforts. We
enter 2016 committed to managing the business for the long term and
aligned as a System around the critical imperative that we must run
great restaurants each and every day for our valued customers."
Fourth quarter results included:
- Global comparable sales increase of 5.0%
- Consolidated revenues decrease of 4% (increase of 5% in
constant currencies)
- Consolidated operating income increase of 7% (16% in
constant currencies)
- Diluted earnings per share of $1.31, an increase of 16% (26% in constant
currencies)
Full year results included:
- Global comparable sales increase of 1.5%
- Consolidated revenues decrease of 7% (increase 3% in
constant currencies)
- Consolidated operating income decrease of 10% (flat in
constant currencies)
- Diluted earnings per share of $4.80, flat (increase 10% in constant
currencies)
The Company returned $2.3 billion
to shareholders through share repurchases and dividends in the
fourth quarter and $9.4 billion for
the full year. This brings the cumulative return to shareholders to
$15.8 billion against our targeted
return of about $30 billion for the
three-year period ending 2016.
In the U.S., fourth quarter comparable sales increased 5.7%,
benefiting from the October launch of All Day Breakfast and, to a
lesser extent, unseasonably mild weather. Operating income for the
quarter rose 30%, driven by positive comparable sales and a gain
from the strategic sale of a unique restaurant property. McDonald's
U.S. business begins 2016 as a customer-led organization focused on
delivering outstanding customer service through comprehensive
simplification efforts, core menu enhancements and a compelling
everyday national value platform. Generating sustained, positive
guest traffic remains a top priority for the segment.
Comparable sales for the International Lead segment increased
4.2% for the quarter, led by strong performance in the U.K.,
Canada and Australia. Fourth quarter operating income
decreased 5% (increased 8% in constant currencies), benefiting from
higher franchised margins. Positive consumer response to multiple
menu, service and value initiatives contributed to the segment's
performance, while macro-economic concerns, particularly in
France, negatively impacted
quarterly sales performance.
In the High Growth markets, fourth quarter comparable sales
increased 3%, reflecting positive performance in Russia and China. Operating income increased 27% (45% in
constant currencies) due, in part, to comparison against the prior
year supplier issue in China,
along with an increase in the segment's franchised margins.
Fourth quarter comparable sales rose 5.9% in the Foundational
markets fueled by broad-based strength in Asia and Europe. Operating income for the quarter was
negatively impacted by strategic charges related to the Company's
global refranchising efforts and weaker results in Japan.
Kevin Ozan, McDonald's Chief
Financial Officer, noted, "In November, we announced financial
goals in conjunction with our business turnaround plan. We outlined
specific targets to return about $30
billion to shareholders through a combination of dividends
and share repurchases for the three-year period ending 2016, plans
to refranchise about 4,000 restaurants by the end of 2018 and
reduce our net annual G&A spending by $500 million, the vast majority of which will be
realized by the end of 2017. These targets are designed to enhance
long-term shareholder value while supporting the work underway to
reignite our business results."
Ozan continued, "During 2015, we demonstrated our commitment to
enhancing shareholder value by returning $9.4 billion to shareholders, while also making
progress on our refranchising and G&A targets. For 2016, we
expect our capital expenditures to remain at about $2 billion - split fairly evenly between opening
new restaurants and reinvesting in existing restaurants as we
pursue targeted opportunities to drive long-term profitable
growth."
Easterbrook concluded, "We are demonstrating that our turnaround
plan is key to restarting growth and becoming a modern and
progressive burger company. I am inspired by the dedication and
collective determination of our U.S., International Lead, High
Growth and Foundational markets to leverage our competitive
strengths as they pursue their growth opportunities. As we enter
2016, we expect continued positive top-line momentum across all
segments."
KEY HIGHLIGHTS -
CONSOLIDATED
|
Dollars in millions,
except per share data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended
December 31,
|
|
Years Ended
December 31,
|
|
2015
|
|
|
2014
|
|
|
Inc/
(Dec)
|
|
|
Inc/ (Dec)
Excluding Currency Translation
|
|
|
2015
|
|
|
2014
|
|
|
Inc/
(Dec)
|
|
|
Inc/ (Dec)
Excluding Currency Translation
|
|
Revenues
|
$
|
6,341.3
|
|
|
$
|
6,572.2
|
|
|
(4)%
|
|
|
5%
|
|
|
$
|
25,413.0
|
|
|
$
|
27,441.3
|
|
|
(7)%
|
|
|
3%
|
|
Operating
income
|
1,880.4
|
|
|
1,751.7
|
|
|
7
|
|
|
16
|
|
|
7,145.5
|
|
|
7,949.2
|
|
|
(10)
|
|
|
0
|
|
Net income
|
1,206.2
|
|
|
1,097.5
|
|
|
10
|
|
|
19
|
|
|
4,529.3
|
|
|
4,757.8
|
|
|
(5)
|
|
|
5
|
|
Earnings per
share-diluted
|
$
|
1.31
|
|
|
$
|
1.13
|
|
|
16%
|
|
|
26%
|
|
|
$
|
4.80
|
|
|
$
|
4.82
|
|
|
0%
|
|
|
10%
|
|
Foreign currency translation had a negative impact of
$0.11 and $0.50 on diluted earnings per share for the
quarter and year, respectively.
Results for the quarter and year benefited from higher
franchised margins and a gain on sale of property in the U.S.,
partly offset by strategic charges, primarily related to goodwill
impairment and other asset write-offs in conjunction with the
Company's refranchising initiatives, restructuring and incremental
restaurant closings. The gain on sale of property in the U.S. and
strategic charges had a positive net impact on diluted earnings per
share of $0.03 for the quarter and a
negative net impact on diluted earnings per share of $0.18 for the year.
For both periods, results benefited from comparison to the prior
year's charges related to certain foreign tax matters and the
China supplier issue. These items
had a negative impact on diluted earnings per share of $0.13 and $0.54 in
the quarter and year ended December 31,
2014, respectively.
Excluding the impact of these current and prior year items,
earnings per share in constant currencies would have increased
$0.13 or 10% for the quarter and
$0.12 or 2% for the year.
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 and year ended
December 31, 2015.
McDonald's Corporation will broadcast its investor earnings
conference call live over the Internet at 10:00 a.m. Central Time on January 25, 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.
Kevin Ozan, Chief Financial
Officer, and Mike Andres, President
- McDonald's USA, will participate
in the UBS Global Consumer Conference in Boston on March 9,
2016. Kevin Ozan will also
participate in the Bank of America Merrill Lynch 2016 Consumer
& Retail Tech Conference in New
York on March 16, 2016. These
presentations will be webcast live and available for replay for a
limited time thereafter at www.investor.mcdonalds.com.
McDonald's plans to release first quarter results before the
market opens on April 22, 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
December 31,
|
2015
|
|
2014
|
|
Inc/
(Dec)
|
Revenues
|
|
|
|
|
|
|
|
Sales by
Company-operated restaurants
|
$
|
4,030.2
|
|
|
$
|
4,296.7
|
|
|
$
|
(266.5)
|
|
|
(6)%
|
|
Revenues from
franchised restaurants
|
2,311.1
|
|
|
2,275.5
|
|
|
35.6
|
|
|
2
|
|
|
|
|
|
|
|
|
|
TOTAL
REVENUES
|
6,341.3
|
|
|
6,572.2
|
|
|
(230.9)
|
|
|
(4)
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses
|
|
|
|
|
|
|
|
Company-operated
restaurant expenses
|
3,418.6
|
|
|
3,676.7
|
|
|
(258.1)
|
|
|
(7)
|
|
Franchised
restaurants—occupancy expenses
|
416.2
|
|
|
421.4
|
|
|
(5.2)
|
|
|
(1)
|
|
Selling,
general & administrative expenses
|
675.1
|
|
|
662.5
|
|
|
12.6
|
|
|
2
|
|
Other operating
(income) expense, net
|
(49.0)
|
|
|
59.9
|
|
|
(108.9)
|
|
|
n/m
|
|
Total operating costs
and expenses
|
4,460.9
|
|
|
4,820.5
|
|
|
(359.6)
|
|
|
(7)
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
1,880.4
|
|
|
1,751.7
|
|
|
128.7
|
|
|
7
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
180.9
|
|
|
153.7
|
|
|
27.2
|
|
|
18
|
|
Nonoperating (income)
expense, net
|
(11.3)
|
|
|
1.9
|
|
|
(13.2)
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
Income before
provision for income taxes
|
1,710.8
|
|
|
1,596.1
|
|
|
114.7
|
|
|
7
|
|
Provision for income
taxes
|
504.6
|
|
|
498.6
|
|
|
6.0
|
|
|
1
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
$
|
1,206.2
|
|
|
$
|
1,097.5
|
|
|
$
|
108.7
|
|
|
10%
|
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE-DILUTED
|
$
|
1.31
|
|
|
$
|
1.13
|
|
|
$
|
0.18
|
|
|
16%
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding-diluted
|
919.9
|
|
|
971.5
|
|
|
(51.6)
|
|
|
(5)%
|
|
n/m Not
meaningful
|
McDONALD'S
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENT OF INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollars and shares
in millions, except per share data
|
|
|
|
|
|
Years Ended
December 31,
|
2015
|
|
2014
|
|
Inc/
(Dec)
|
Revenues
|
|
|
|
|
|
|
|
Sales by
Company-operated restaurants
|
$
|
16,488.3
|
|
|
$
|
18,169.3
|
|
|
$
|
(1,681.0)
|
|
|
(9)%
|
|
Revenues from
franchised restaurants
|
8,924.7
|
|
|
9,272.0
|
|
|
(347.3)
|
|
|
(4)
|
|
|
|
|
|
|
|
|
|
TOTAL
REVENUES
|
25,413.0
|
|
|
27,441.3
|
|
|
(2,028.3)
|
|
|
(7)
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses
|
|
|
|
|
|
|
|
Company-operated
restaurant expenses
|
13,976.9
|
|
|
15,288.3
|
|
|
(1,311.4)
|
|
|
(9)
|
|
Franchised
restaurants—occupancy expenses
|
1,646.9
|
|
|
1,697.3
|
|
|
(50.4)
|
|
|
(3)
|
|
Selling,
general & administrative expenses
|
2,434.3
|
|
|
2,487.9
|
|
|
(53.6)
|
|
|
(2)
|
|
Other operating
(income) expense, net
|
209.4
|
|
|
18.6
|
|
|
190.8
|
|
|
n/m
|
|
Total operating costs
and expenses
|
18,267.5
|
|
|
19,492.1
|
|
|
(1,224.6)
|
|
|
(6)
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
7,145.5
|
|
|
7,949.2
|
|
|
(803.7)
|
|
|
(10)
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
638.3
|
|
|
576.4
|
|
|
61.9
|
|
|
11
|
|
Nonoperating (income)
expense, net
|
(48.5)
|
|
|
0.8
|
|
|
(49.3)
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
Income before
provision for income taxes
|
6,555.7
|
|
|
7,372.0
|
|
|
(816.3)
|
|
|
(11)
|
|
Provision for income
taxes
|
2,026.4
|
|
|
2,614.2
|
|
|
(587.8)
|
|
|
(22)
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
$
|
4,529.3
|
|
|
$
|
4,757.8
|
|
|
$
|
(228.5)
|
|
|
(5)%
|
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE-DILUTED
|
$
|
4.80
|
|
|
$
|
4.82
|
|
|
$
|
(0.02)
|
|
|
0%
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding-diluted
|
944.6
|
|
|
986.3
|
|
|
(41.7)
|
|
|
(4)%
|
|
n/m Not
meaningful
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/mcdonalds-reports-fourth-quarter-and-full-year-2015-results-300208704.html
SOURCE McDonald's Corporation