10-QPeriod: Q1 FY2012

MCDONALDS CORP Quarterly Report for Q1 Ended Mar 31, 2012

Filed May 8, 2012For Securities:MCD

Summary

McDonald's Corporation (MCD) reported solid financial results for the first quarter ended March 31, 2012. Total revenues increased by 7% (8% in constant currencies) to $6.55 billion, driven by strong comparable sales growth of 7.3% globally. Net income rose by 5% to $1.27 billion, with diluted earnings per share (EPS) at $1.23, a 7% increase (8% in constant currencies). The company continued its focus on growth initiatives, including menu optimization, restaurant modernization, and convenience enhancements, which resonated well with customers across all major geographic segments. Despite a challenging global economy, McDonald's demonstrated resilience and delivered positive comparable sales and guest count increases in every region. Key financial strengths include robust operating income growth of 8% (9% in constant currencies) and consistent cash flow generation. The company actively returned capital to shareholders through $802.8 million in share repurchases and $712.3 million in dividends during the quarter. While facing some cost pressures, particularly in commodity and labor, McDonald's remains strategically positioned with a focus on value, innovation, and an enhanced customer experience to navigate current economic headwinds and drive future performance.

Financial Highlights

47 data points
Beta

Revenue

$6.55B

Net Income

$1.27B

19.3% Net Margin

EPS (Diluted)

$1.23

Total Assets

$33.33B

Cash & Equivalents

$2.29B

Free Cash Flow

$1.05B

Financial Statements
Beta
Revenue$6.55B
SG&A Expenses$592.50M
Operating Expenses$4.58B
Operating Income$1.96B
Interest Expense$128.90M
Net Income$1.27B
EPS (Basic)$1.24
EPS (Diluted)$1.23
Shares Outstanding (Basic)1.02B
Shares Outstanding (Diluted)1.03B

Key Highlights

  • 1Total revenues grew 7% year-over-year to $6.55 billion, with constant currency revenue growth at 8%.
  • 2Global comparable sales increased by 7.3%, indicating strong customer demand across all segments.
  • 3Net income increased 5% to $1.27 billion, and diluted EPS rose 7% to $1.23 (8% in constant currencies).
  • 4Operating income saw a healthy increase of 8% (9% in constant currencies) to $1.96 billion.
  • 5The company returned significant capital to shareholders, repurchasing $802.8 million in stock and paying $712.3 million in dividends.
  • 6Capital expenditures were $588.4 million, with over half allocated to opening new restaurants.
  • 7The US segment showed particularly strong comparable sales growth of 8.9%.

Frequently Asked Questions

McDonald's reported total revenues of $6,546.6 million for the first quarter ended March 31, 2012, an increase of 7% compared to $6,111.6 million in the prior year period. Excluding the impact of foreign currency translation, revenues increased by 8%.

Net income for the first quarter of 2012 was $1,266.7 million, a 5% increase from $1,209.0 million in the same period last year. Diluted earnings per share (EPS) were $1.23, up 7% from $1.15 in the prior year. The company noted that foreign currency translation had a negative impact of $0.01 on diluted EPS.

Global comparable sales increased by 7.3% for the quarter. This growth was driven by a combination of factors including menu innovations (like Chicken McBites), reimaged restaurants enhancing the customer experience, strong execution of core menu items, and value initiatives. The US segment, in particular, saw robust comparable sales growth of 8.9%.

McDonald's actively returned capital to shareholders during the quarter. The company repurchased 8.1 million shares for $802.8 million and paid a quarterly dividend of $0.70 per share, totaling $712.3 million. Capital expenditures for the quarter were $588.4 million, primarily for new restaurant openings and reinvestment in existing locations.