Summary
McDonald's Corporation's 2008 10-K filing reveals a year of robust performance characterized by strong comparable sales growth and a strategic shift towards a more heavily franchised business model. Despite a challenging economic environment, the company achieved a 6.9% increase in comparable sales and a 3.1% rise in comparable guest counts. This growth was fueled by successful initiatives across key markets, including the U.S. (breakfast, chicken, beverages), Europe (tiered menus, reimaging), and APMEA (convenience, breakfast, value). The company continued its commitment to returning capital to shareholders, returning $5.8 billion in 2008 through dividends and share repurchases, and maintained strong financial discipline. The company's strategic direction emphasizes "being better, not just bigger," focusing on understanding customer needs, sharing best practices, and optimizing operations. The ongoing transition to a more franchised model is expected to enhance cash flow stability and returns. Looking ahead to 2009, McDonald's plans to continue investing in restaurant improvements, expanding its beverage offerings, and focusing on core menu favorites, while navigating expected commodity cost increases and potential negative impacts from foreign currency translation.
Financial Highlights
49 data points| Revenue | $23.52B |
| SG&A Expenses | $2.36B |
| Operating Expenses | $17.08B |
| Operating Income | $6.44B |
| Interest Expense | $522.60M |
| Net Income | $4.31B |
| EPS (Basic) | $3.83 |
| EPS (Diluted) | $3.76 |
| Shares Outstanding (Basic) | 1.13B |
| Shares Outstanding (Diluted) | 1.15B |
Key Highlights
- 1Achieved 6.9% comparable sales growth and 3.1% comparable guest count increase in 2008, building on strong 2007 performance.
- 2Systemwide sales increased by 11% (9% in constant currencies).
- 3Company-operated restaurant margins improved to 17.6%, and franchised margins improved to 82.3%.
- 4Net income per diluted share from continuing operations was $3.76, a 16% increase after adjusting for the Latam transaction.
- 5Returned $5.8 billion to shareholders in 2008 through share repurchases ($4.0 billion) and dividends ($1.8 billion), including a 33% increase in the quarterly cash dividend.
- 6Continued strategic shift towards a more franchised model, increasing the percentage of franchised restaurants to 80% by year-end 2008.
- 7Achieved strong ROIIC of 38.9% for one-year and 37.5% for three-year periods in 2008.