How did McDonald's revenue perform in Q2 2019, and what drove the changes?

Consolidated revenues were flat at $5,341.3 million for the quarter ended June 30, 2019, compared to $5,353.9 million in the prior year. In constant currencies, revenues increased by 3%. This performance was driven by strong comparable sales growth (up 6.5%) across all segments, which was partly offset by the impact of refranchising and unfavorable foreign currency translation.

What are the key growth drivers and strategic initiatives for McDonald's?

McDonald's is focused on its Velocity Growth Plan, emphasizing three key accelerators: 'Experience of the Future' (EOTF) for restaurant modernization and enhanced customer experience, Digital initiatives leveraging technology for ordering and payment (including the acquisition of Dynamic Yield), and Delivery services expanding convenience. These initiatives are designed to drive sustained comparable sales growth, guest count increases, and higher average checks.

How is McDonald's returning value to shareholders?

McDonald's demonstrated a strong commitment to returning capital to shareholders. In the quarter ended June 30, 2019, the company returned $2.0 billion through share repurchases and dividends. For the first six months of 2019, this totaled $3.8 billion. The company was on track to return approximately $9 billion in 2019 and complete its three-year cash return target of approximately $25 billion.

What impact did the new lease accounting standard have on the financial statements?

McDonald's adopted the new lease accounting standard (ASC 842) effective January 1, 2019. This resulted in the recognition of a significant non-cash item: a Right of Use Asset and a corresponding Lease Liability of $12.5 billion on the Condensed Consolidated Balance Sheet as of June 30, 2019. While this impacts the balance sheet, it does not affect the company's cash flows.

MCD 10-Q Quarterly Report Q2 FY2019 — Revenue, Net Income, EPS

Summary

McDonald's Corporation (MCD) reported its Q2 2019 financial results, showcasing resilient performance driven by strong comparable sales growth across all segments, increasing by 6.5% for the quarter. While consolidated revenues were flat year-over-year, they grew 3% in constant currencies, indicating underlying business strength despite the impact of refranchising. The company demonstrated solid operational execution, with operating income seeing a 1% increase (4% in constant currencies) despite facing strategic charges. Diluted earnings per share (EPS) also saw a modest increase of 4% to $1.97. Key strategic initiatives like the 'Experience of the Future' (EOTF) modernization, digital investments (including the acquisition of Dynamic Yield), and expansion of delivery services continue to be central to McDonald's growth strategy, contributing to higher average checks and customer satisfaction. Financially, McDonald's returned $2.0 billion to shareholders in the quarter through share repurchases and dividends, reinforcing its commitment to capital allocation. The adoption of new lease accounting standards (ASC 842) introduced a significant right-of-use asset and lease liability on the balance sheet, a non-cash accounting change. While overall revenues saw a slight dip, the constant currency growth and positive comparable sales highlight the company's ability to drive traffic and sales in a competitive market, positioning it for continued long-term value creation for its shareholders.

Financial Highlights

50 data points

Beta

Revenue

$5.41B

0.9% Gross Margin

Net Income

$1.52B

0.3% Net Margin

EPS (Diluted)

$1.97

Total Assets

$46.20B

Cash & Equivalents

$1.13B

Free Cash Flow

$1.33B

Financial Statements

Beta

Revenue	$5.41B
Cost of Revenue	$544.70M
Gross Profit	$4.87B
SG&A Expenses	$533.10M
Operating Expenses	$3.14B
Operating Income	$2.27B
Interest Expense	$284.20M
Net Income	$1.52B
EPS (Basic)	$1.99
EPS (Diluted)	$1.97
Shares Outstanding (Basic)	761.80M
Shares Outstanding (Diluted)	768.70M

Key Highlights

1Global comparable sales increased by 6.5% for the quarter and 6.0% for the six months, demonstrating strong customer demand.
2Consolidated revenues were flat but increased 3% in constant currencies for the quarter, indicating underlying performance resilience.
3Diluted EPS rose 4% to $1.97 for the quarter and 2% to $3.69 for the six months, supported by share repurchases.
4Strategic investments in 'Experience of the Future' (EOTF), digital capabilities (including Dynamic Yield acquisition), and delivery services are driving higher average checks and customer engagement.
5The company returned $2.0 billion to shareholders in the quarter through dividends and share repurchases.
6New lease accounting standards (ASC 842) resulted in a $12.5 billion recognition of a lease right-of-use asset and lease liability, a non-cash accounting change.

MCDONALDS CORP Quarterly Report for Q2 Ended Jun 30, 2019

Summary

Financial Highlights

Key Highlights

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