FOR IMMEDIATE RELEASE | FOR MORE INFORMATION CONTACT: |
7/28/2020 | Investors: Mike Cieplak, investor.relations@us.mcd.com |
Media: Lauren Altmin, lauren.altmin@us.mcd.com |
• | As of June 30, 2020, nearly all McDonald’s restaurants around the world were open to serve customers. |
• | Global comparable sales declined 23.9%. The U.S., International Operated Markets segment and global monthly comparable sales sequentially improved throughout the second quarter. |
• | Consolidated revenues decreased 30% (29% in constant currencies). |
• | Systemwide sales decreased 24% (23% in constant currencies). |
• | Diluted earnings per share was $0.65. |
Increase/(Decrease) | |||||||||||||
Month Ended | Quarters Ended June 30, | ||||||||||||
April 30, 2020 | May 31, 2020 | June 30, 2020 | 2020 | 2019 | |||||||||
U.S. | (19.2 | )% | (5.1 | )% | (2.3 | )% | (8.7 | )% | 5.7 | % | |||
International Operated Markets | (66.7 | ) | (40.5 | ) | (18.4 | ) | (41.4 | ) | 6.6 | ||||
International Developmental Licensed Markets & Corporate | (32.3 | ) | (20.0 | ) | (20.3 | ) | (24.2 | ) | 7.9 | ||||
Total | (39.0 | )% | (20.9 | )% | (12.3 | )% | (23.9 | )% | 6.5 | % |
* | Comparable sales are compared to the same period in the prior year and represent sales at all restaurants, whether operated by the Company or by franchisees, in operation at least thirteen months, including those temporarily closed. |
• | Comparable Sales: Global comparable sales results sequentially improved throughout the second quarter of 2020 as markets reopened restaurants and governments eased restrictions. |
• | U.S.: Comparable sales results sequentially improved throughout the second quarter of 2020 and continued to benefit from strong average check growth. Comparable sales and guest counts remained negative, particularly at the breakfast daypart. |
• | International Operated Markets: Comparable sales results were heavily impacted by temporary restaurant closures and limited operations, particularly in the U.K. and France. While comparable sales remained negative in nearly all markets, comparable sales results sequentially improved throughout the quarter for all markets. Comparable sales were positive in Australia in May and June driven by strong drive-thru performance. |
• | International Developmental Licensed Markets: Comparable sales results were impacted by temporary restaurant closures across nearly all geographies, most notably in Latin America. Results also reflected continued negative comparable sales in China and positive comparable sales in Japan for the quarter. |
Quarters Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||
2020 | 2019 | Inc/ (Dec) | Inc/ (Dec) Excluding Currency Translation | 2020 | 2019 | Inc/ (Dec) | Inc/ (Dec) Excluding Currency Translation | ||||||||||||||||||||||||
Revenues | $ | 3,761.5 | $ | 5,409.8 | (30 | ) | % | (29 | ) | % | $ | 8,475.9 | $ | 10,433.9 | (19 | ) | % | (17 | ) | % | |||||||||||
Operating income | 961.1 | 2,273.9 | (58 | ) | (57 | ) | 2,654.7 | 4,367.9 | (39 | ) | (38 | ) | |||||||||||||||||||
Net income | 483.8 | 1,516.9 | (68 | ) | (67 | ) | 1,590.7 | 2,845.3 | (44 | ) | (43 | ) | |||||||||||||||||||
Earnings per share-diluted | $ | 0.65 | $ | 1.97 | (67 | ) | % | (66 | ) | % | $ | 2.12 | $ | 3.69 | (43 | ) | % | (42 | ) | % |
• | Over $200 million of committed incremental franchisee support for marketing to accelerate recovery and drive growth across the U.S. and International Operated Markets. |
◦ | About $100 million was recorded in the U.S., with over half of that amount reflected in franchised margins and the remaining amount reflected in Selling, General and Administrative Expenses. |
◦ | The remaining over $100 million of support was recorded in Selling, General and Administrative Expenses in the International Operated Markets segment. |
• | $31 million of payments to distribution centers for obsolete inventory to support franchisee liquidity (reflected in Other Operating (Income) Expenses, Net). |
• | An increase in reserves for bad debts of $45 million and $92 million for the quarter and six months, respectively. |
• | Lower gains on sales of restaurant businesses. |
• | Lower equity in earnings of unconsolidated affiliates. |
Quarters Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||
2020 | 2019 | Inc/ (Dec) | Inc/ (Dec) Excluding Currency Translation | 2020 | 2019 | Inc/ (Dec) | Inc/ (Dec) Excluding Currency Translation | ||||||||||||||||||||||||
GAAP earnings per share-diluted | $ | 0.65 | $ | 1.97 | (67 | ) | % | (66 | ) | % | $ | 2.12 | $ | 3.69 | (43 | ) | % | (42 | ) | % | |||||||||||
Strategic charges | 0.01 | 0.08 | 0.01 | 0.08 | |||||||||||||||||||||||||||
Non-GAAP earnings per share-diluted | $ | 0.66 | $ | 2.05 | (68 | ) | % | (67 | ) | % | $ | 2.13 | $ | 3.77 | (44 | ) | % | (43 | ) | % |
As of June 30, 2020 | |||
U.S. | 99 | % | |
International Operated Markets | 94 | ||
International Developmental Licensed Markets | 94 | ||
Total | 96 | % |
* | Restaurants include those with limited operations including drive-thru, delivery, and/or take-away. |
• | Substantially all restaurants were operating drive-thru, delivery, and/or take-away with a limited menu. Limited hours also applied. |
• | About 2,000 restaurant dining rooms reopened with reduced seating capacity. |
• | All markets were operating with drive-thru and delivery (where available) with limited menus and hours. |
• | Some markets were operating take-away and/or dine-in with reduced seating capacity. |
• | Substantially all restaurants in China and Japan were operating with reduced seating capacity for dine-in. |
• | Latin America was the geography with the most restaurants closed. |
Dollars and shares in millions, except per share data | ||||||||||||||
Quarters Ended June 30, | 2020 | 2019 | Inc/ (Dec) | |||||||||||
Revenues | ||||||||||||||
Sales by Company-operated restaurants | $ | 1,593.7 | $ | 2,400.4 | $ | (806.7 | ) | (34 | )% | |||||
Revenues from franchised restaurants | 2,088.0 | 2,940.9 | (852.9 | ) | (29 | ) | ||||||||
Other revenues | 79.8 | 68.5 | 11.3 | 16 | ||||||||||
TOTAL REVENUES | 3,761.5 | 5,409.8 | (1,648.3 | ) | (30 | ) | ||||||||
Operating costs and expenses | ||||||||||||||
Company-operated restaurant expenses | 1,448.4 | 1,967.1 | (518.7 | ) | (26 | ) | ||||||||
Franchised restaurants-occupancy expenses | 524.5 | 544.7 | (20.2 | ) | (4 | ) | ||||||||
Other restaurant expenses | 63.3 | 55.4 | 7.9 | 14 | ||||||||||
Selling, general & administrative expenses | ||||||||||||||
Depreciation and amortization | 71.0 | 63.2 | 7.8 | 12 | ||||||||||
Other | 576.0 | 469.9 | 106.1 | 23 | ||||||||||
Other operating (income) expense, net | 117.2 | 35.6 | 81.6 | n/m | ||||||||||
Total operating costs and expenses | 2,800.4 | 3,135.9 | (335.5 | ) | (11 | ) | ||||||||
OPERATING INCOME | 961.1 | 2,273.9 | (1,312.8 | ) | (58 | ) | ||||||||
Interest expense | 319.1 | 284.2 | 34.9 | 12 | ||||||||||
Nonoperating (income) expense, net | (6.7 | ) | (18.1 | ) | 11.4 | 63 | ||||||||
Income before provision for income taxes | 648.7 | 2,007.8 | (1,359.1 | ) | (68 | ) | ||||||||
Provision for income taxes | 164.9 | 490.9 | (326.0 | ) | (66 | ) | ||||||||
NET INCOME | $ | 483.8 | $ | 1,516.9 | $ | (1,033.1 | ) | (68 | )% | |||||
EARNINGS PER SHARE-DILUTED | $ | 0.65 | $ | 1.97 | $ | (1.32 | ) | (67 | )% | |||||
Weighted average shares outstanding-diluted | 748.6 | 768.7 | (20.1 | ) | (3 | )% |
Dollars and shares in millions, except per share data | ||||||||||||||
Six Months Ended June 30, | 2020 | 2019 | Inc/ (Dec) | |||||||||||
Revenues | ||||||||||||||
Sales by Company-operated restaurants | $ | 3,619.5 | $ | 4,640.9 | $ | (1,021.4 | ) | (22 | )% | |||||
Revenues from franchised restaurants | 4,696.0 | 5,656.0 | (960.0 | ) | (17 | ) | ||||||||
Other revenues | 160.4 | 137.0 | 23.4 | 17 | ||||||||||
TOTAL REVENUES | 8,475.9 | 10,433.9 | (1,958.0 | ) | (19 | ) | ||||||||
Operating costs and expenses | ||||||||||||||
Company-operated restaurant expenses | 3,201.2 | 3,853.3 | (652.1 | ) | (17 | ) | ||||||||
Franchised restaurants-occupancy expenses | 1,078.7 | 1,077.8 | 0.9 | 0 | ||||||||||
Other restaurant expenses | 128.8 | 108.7 | 20.1 | 18 | ||||||||||
Selling, general & administrative expenses | ||||||||||||||
Depreciation and amortization | 144.5 | 124.6 | 19.9 | 16 | ||||||||||
Other | 1,092.3 | 907.6 | 184.7 | 20 | ||||||||||
Other operating (income) expense, net | 175.7 | (6.0 | ) | 181.7 | n/m | |||||||||
Total operating costs and expenses | 5,821.2 | 6,066.0 | (244.8 | ) | (4 | ) | ||||||||
OPERATING INCOME | 2,654.7 | 4,367.9 | (1,713.2 | ) | (39 | ) | ||||||||
Interest expense | 599.1 | 558.3 | 40.8 | 7 | ||||||||||
Nonoperating (income) expense, net | (38.0 | ) | (29.5 | ) | (8.5 | ) | (29 | ) | ||||||
Income before provision for income taxes | 2,093.6 | 3,839.1 | (1,745.5 | ) | (45 | ) | ||||||||
Provision for income taxes | 502.9 | 993.8 | (490.9 | ) | (49 | ) | ||||||||
NET INCOME | $ | 1,590.7 | $ | 2,845.3 | $ | (1,254.6 | ) | (44 | )% | |||||
EARNINGS PER SHARE-DILUTED | $ | 2.12 | $ | 3.69 | $ | (1.57 | ) | (43 | )% | |||||
Weighted average shares outstanding-diluted | 749.6 | 770.2 | (20.6 | ) | (3 | )% |