Summary
McDonald's Corporation reported a decrease in revenues and net income for both the quarter and the first six months of 2015 compared to the prior year. Total revenues declined by 10% in both periods, impacted by foreign currency headwinds, although constant currency revenues showed a modest increase of 1% for the quarter and were flat for the six months. This performance was largely attributed to negative comparable sales across most major segments, particularly in the U.S. and Japan, stemming from decreased guest traffic. The company is actively implementing a turnaround plan focused on restoring growth, enhancing brand appeal, and unlocking financial value, which includes a significant acceleration of refranchising to achieve a largely franchised model by 2018 and delivering substantial cost savings. Despite the top-line challenges, McDonald's continued its commitment to returning capital to shareholders, repurchasing substantial amounts of stock and paying dividends.
Financial Highlights
48 data points| Revenue | $6.50B |
| SG&A Expenses | $592.40M |
| Operating Expenses | $4.65B |
| Operating Income | $1.85B |
| Interest Expense | $149.20M |
| Net Income | $1.20B |
| EPS (Basic) | $1.26 |
| EPS (Diluted) | $1.26 |
| Shares Outstanding (Basic) | 953.20M |
| Shares Outstanding (Diluted) | 957.60M |
Key Highlights
- 1Total revenues decreased by 10% year-over-year for both the quarter and the six-month period ended June 30, 2015, reaching $6,497.7 million and $12,456.6 million, respectively. Excluding currency impacts, revenues were up 1% for the quarter and flat for the six months.
- 2Net income for the quarter declined 13% to $1,202.4 million, and for the six months, it fell 22% to $2,013.9 million, reflecting strategic charges and lower operating income.
- 3Diluted earnings per share (EPS) saw a decrease, with the quarter at $1.26 (down 10%) and the six months at $2.09 (down 20%). Foreign currency translation had a significant negative impact on EPS.
- 4Global comparable sales decreased by 0.7% for the quarter and 1.5% for the six months, primarily driven by negative guest traffic in key markets like the U.S. and Japan.
- 5The company is undergoing a significant strategic shift, with a turnaround plan to refranchise approximately 3,500 restaurants by the end of 2018, aiming for a 90% franchised model.
- 6Capital allocation remains a priority, with $3.9 billion returned to shareholders year-to-date through share repurchases ($2.3 billion) and dividends ($1.6 billion), aligning with the target to return $18-20 billion by the end of 2016.
- 7Long-term debt increased to $17.9 billion from $15.0 billion at the end of 2014, mainly due to new debt issuances to fund operations and shareholder returns.