01—Abstract
Summary
Summary of the 10-Q filed May 12, 2025. Cited figures are marked; the original filing is the authoritative source.
McDonald's Corporation reported a decrease in total revenues for the first quarter of 2025, with consolidated revenues down 3% to $5.96 billiona.
This was primarily driven by a 2% decrease in franchised revenues and a 9% decrease in sales from company-owned restaurants, while other revenues saw a significant 78% increase. Net income for the quarter was $1.87 billionb, a 3% decrease year-over-year, resulting in diluted earnings per share of $2.60, down 2%. The company experienced a 1.0% decrease in global comparable sales, with the U.S. market down 3.6% due to negative comparable guest counts, while International Developmental Licensed Markets saw a 3.5% increase.
The company continues to execute its "Accelerating the Arches" strategy, focusing on digital, delivery, drive-thru, and restaurant development, with plans to open approximately 2,200 new restaurants globally in 2025. Despite revenue and net income declines, the company maintained a strong operating income of $2.65 billionc and generated $2.4 billion in cash from operations, supporting its commitment to dividends and share repurchases.
02—Key points
Key Highlights
- Total revenues decreased by 3% to $5.96 billion in Q1 2025, impacted by lower franchised and company-owned restaurant sales.
- Net income declined by 3% to $1.87 billion, with diluted EPS falling 2% to $2.60.
- Global comparable sales decreased by 1.0%, with the U.S. market showing a notable 3.6% decline.
- The company plans to accelerate restaurant development, aiming to open approximately 2,200 new restaurants globally in 2025.
- Cash provided by operations remained strong at $2.4 billion, supporting ongoing capital allocation priorities.
- Restructuring charges related to the 'Accelerating the Organization' initiative amounted to $66 million for the quarter.
- Dividends declared per common share increased to $1.77 from $1.67 in the prior year's comparable quarter.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2025, McDonalds Corp kept $0.31.
- Revenue$5.96B100.0%
- Cost of revenue−$620.0M10.4%
- Gross profit$5.34B89.6%
- Operating costs−$2.69B45.1%
- Operating income$2.65B44.5%
- Interest, other & tax−$780.0M13.1%
- Net income$1.87B31.4%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed May 12, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $5.96B$6.17B | −3.5% |
| Cost of Revenue | $620.00M$627.00M | −1.1% |
| Gross Profit | $5.34B$5.54B | −3.7% |
| SG&A Expenses | $682.00M$720.00M | −5.3% |
| Operating Expenses | $3.31B$3.43B | −3.6% |
| Operating Income | $2.65B$2.74B | −3.2% |
| Interest Expense | $376.00M$372.00M | +1.1% |
| Net Income | $1.87B$1.93B | −3.2% |
| EPS (Basic) | $2.61$2.67 | −2.2% |
| EPS (Diluted) | $2.60$2.66 | −2.3% |
| Shares Outstanding (Basic) | 715722 | −1.0% |
| Shares Outstanding (Diluted) | 718726 | −1.1% |
05—Questions
Frequently Asked Questions
What is the primary reason for the decrease in total revenues?
The decrease in total revenues by 3% to $5.96 billion was primarily driven by a 2% decline in franchised restaurant revenues and a significant 9% decrease in sales from company-owned and operated restaurants, partially offset by a substantial increase in 'Other revenues'.
How is the company's 'Accelerating the Arches' strategy progressing?
The company continues to focus on its 'Accelerating the Arches' strategy, emphasizing digital, delivery, drive-thru, and restaurant development. In 2025, it plans to open approximately 2,200 new restaurants globally, aiming for over 4% net new unit growth. This strategy is also supported by modernization efforts under 'Accelerating the Organization', which incurred $66 million in restructuring charges this quarter.
What is the impact of foreign currency translation on the company's results?
Foreign currency translation had a negative impact on reported results, primarily due to the weakening of major currencies against the U.S. dollar, notably the Euro. This resulted in a $0.04 decrease in diluted earnings per share for the quarter.
What is the company's outlook for restaurant unit growth in 2025?
McDonald's expects net restaurant unit expansion to contribute slightly over 2% to 2025 Systemwide sales growth. They anticipate opening approximately 2,200 new restaurants globally, with nearly 1,800 net restaurant additions expected for the year.
06—Continue