10-QPeriod: Q1 FY2013

MCDONALDS CORP Quarterly Report for Q1 Ended Mar 31, 2013

Filed May 1, 2013For Securities:MCD

Summary

McDonald's Corporation's first quarter 2013 results showed a slight increase in total revenues, driven primarily by franchise revenue growth and new restaurant openings, despite a 1.0% decrease in global comparable sales. Net income remained stable year-over-year, and diluted earnings per share saw a modest 2% increase (3% in constant currencies). The company continues to navigate a challenging global economic environment, with economic headwinds pressuring performance across key markets. The company demonstrated financial discipline through dividend payments and share repurchases, indicating a commitment to returning value to shareholders. While overall revenue showed resilience, the decrease in comparable sales and company-operated margins highlights ongoing cost pressures and a cautious consumer environment. McDonald's remains focused on its "Plan to Win" strategy, emphasizing menu optimization, customer experience modernization, and broadening accessibility to drive long-term sustainable growth.

Financial Highlights

47 data points
Beta

Revenue

$6.61B

Net Income

$1.27B

19.2% Net Margin

EPS (Diluted)

$1.26

Total Assets

$34.12B

Cash & Equivalents

$1.87B

Free Cash Flow

$1.05B

Financial Statements
Beta
Revenue$6.61B
SG&A Expenses$596.50M
Operating Expenses$4.66B
Operating Income$1.95B
Interest Expense$128.10M
Net Income$1.27B
EPS (Basic)$1.27
EPS (Diluted)$1.26
Shares Outstanding (Basic)1.00B
Shares Outstanding (Diluted)1.01B

Key Highlights

  • 1Total revenues increased by 1% to $6.6 billion, while constant currency revenues also grew by 1%.
  • 2Global comparable sales decreased by 1.0%, with comparable guest counts down 1.9%, reflecting challenging economic conditions.
  • 3Net income was flat at $1.27 billion, while diluted earnings per share increased by 2% to $1.26 (3% in constant currencies).
  • 4The company returned $772.2 million to shareholders through dividends and repurchased approximately $354.3 million of its stock.
  • 5Company-operated restaurant margins decreased by 8% (7% in constant currencies) due to negative comparable sales and cost pressures.
  • 6The U.S. and Europe segments experienced slight revenue declines in constant currencies, while APMEA saw a modest increase.
  • 7The company plans significant capital expenditures of approximately $3.2 billion for 2013, with over half dedicated to opening new restaurants.

Frequently Asked Questions

Revenue growth was driven by expansion, specifically net restaurant additions and growth in franchised revenues, which offset a decline in global comparable sales.

McDonald's expects global economic headwinds to persist, leading to continued pressure on performance. Comparable sales are anticipated to remain challenging, and margins are expected to be under pressure throughout 2013 due to these conditions and rising costs.

The company is returning value through consistent dividend payments, with $0.77 per share declared in the quarter, and through share repurchases. In Q1 2013, McDonald's paid $772.2 million in dividends and repurchased approximately $354.3 million of its stock.

Foreign currency translation had a minimal negative impact on consolidated operating results for the quarter. Specifically, it had a negative impact of $0.01 per share on diluted earnings per share.