McDonald's Reports Solid Third Quarter, Warns on Outlook
22 Oct 2013 --- McDonald's Corporation has announced results for the third quarter ended September 30, 2013. For the quarter, the Company posted higher revenues, operating income and earnings per share compared with the prior year.
"Our unwavering commitment to providing an outstanding restaurant experience to every customer, every time guides our plans and keeps our customers at the forefront of all we do," said McDonald's President and Chief Executive Officer Don Thompson. "We are focused on delivering what our customers want most in any environment - great-tasting food served in a contemporary, inviting atmosphere at the speed and convenience that is in tune with today's busy lifestyles. For the quarter, our results reflect McDonald's ability to grow amid the broad-based challenges of the current environment by focusing on those areas of the business within our control."
Third Quarter results included:
•Global comparable sales increase of 0.9%
•Consolidated revenues increase of 2% (2% in constant currencies)
•Consolidated operating income increase of 6% (6% in constant currencies)
•Diluted earnings per share of $1.52, up 6% (7% in constant currencies)
•Returned $1.3 billion to shareholders through dividends and share repurchases
In addition, the Company previously announced the following:
•On September 18, 2013, McDonald's Board of Directors increased the quarterly cash dividend by 5% to $0.81 per share - the equivalent of $3.24 per share annually - effective for the fourth quarter 2013. The Company expects to return between $4.5 and $5.0 billion to shareholders through dividends and share repurchases for the year.
In the U.S., comparable sales increased 0.7% in the third quarter while operating income rose 5%. During the quarter, the U.S. featured new core favorites and the popular Monopoly promotion and introduced Mighty Wings with a national, limited-time offer. Looking ahead, the U.S. is focused on fortifying its value leadership position and leveraging recently introduced chicken, beef and beverage options to enhance sales and profitability.
For the quarter, Europe's comparable sales rose 0.2%. Operating income increased 11% (up 8% in constant currencies) reflecting strong performance in the U.K. and Russia and solid results in France, partially offset by Germany. Throughout Europe, ongoing efforts to recalibrate key market value platforms and enhance the McDonald's experience through menu innovation and marketing are designed to strengthen the business for the long term.
Comparable sales in Asia/Pacific, Middle East and Africa (APMEA) declined 1.4% for the quarter. Third quarter operating income declined 12% (down 4% in constant currencies) reflecting weakness in China, Japan and Australia due, in part, to the ongoing challenging environment. Throughout the segment, APMEA remains aligned behind the key priorities of accelerating growth at the breakfast and late-night dayparts, enhancing local relevance and broadening accessibility with branded affordability, expanded conveniences and new restaurant openings.
Looking ahead, the Company expects the dynamics of the current environment to persist. For the fourth quarter, the Company expects global comparable sales performance to be in-line with recent quarterly trends while restaurant margin percentages are expected to decline at a level relatively similar to first quarter results. Global comparable sales for the month of October are expected to be relatively flat.
"While we are focused on strengthening our near-term performance, the current environment continues to pressure results," said Don Thompson. "Around the world, we remain confident in our ability to drive sustained, long-term profitable growth through our global growth priorities - optimizing the menu, modernizing the customer experience and broadening accessibility. Moving forward, we are committed to enhancing shareholder value through disciplined investments that support our long-term growth opportunities and further differentiate Brand McDonald's."
