McDonald’s: Reports First Quarter 2015 Results

Oak Brook / IL. (mdc) McDonald´s Corporation announced results for the first quarter ended March 31, 2015. First quarter results included:

  • Global comparable sales decrease of 2.3 percent, reflecting negative guest traffic in all major segments
  • Consolidated revenues decrease of eleven percent (one percent in constant currencies)
  • Consolidated operating income decrease of 28 percent (20 percent in constant currencies) due to weaker operating performance and 195 million USD of strategic charges related to restaurant closings and other management actions
  • Diluted earnings per share of 0.84 USD, a decrease of 31 percent (23 percent in constant currencies), which includes strategic charges totalling 0.17 USD per share and a negative foreign currency translation impact of 0.09 USD per share. In constant currencies and excluding the strategic charges, earnings per share decreased 0.11 USD or nine percent
  • Return of 1.4 billion USD to shareholders through dividends and share repurchases

«As the world´s leading restaurant company, we are evolving to be more responsive to today´s customer», said McDonald´s President and Chief Executive Officer Steve Easterbrook. «McDonald´s management team is keenly focused on acting more quickly to better address today´s consumer needs, expectations and the competitive marketplace. We are developing a turnaround plan to improve our performance and deliver enduring profitable growth. We look forward to sharing the initial details of this plan on May 04, 2015».

In the U.S., first quarter comparable sales decreased 2.6 percent reflecting negative sales and guest traffic as the segment´s product and promotional offers did not overcome the competitive activity. U.S. operating income for the quarter declined eleven percent, reflecting weak sales results and the impact of restructuring and restaurant closing charges. During the quarter, the U.S. continued to simplify its menu and focus on local menu initiatives to be more responsive to consumers´ preferences.

Europe´s first quarter comparable sales declined 0.6 percent as positive performance in the U.K. was more than offset by weak results in France and Russia. First quarter operating income decreased 20 percent (four percent in constant currencies) reflecting soft consumer sentiment and currency and inflation pressures in Russia, as well as ongoing macro-economic headwinds across much of Europe.

APMEA´s first quarter comparable sales decreased 8.3 percent primarily due to the impact of prolonged, broad-based consumer perception issues in Japan, along with negative but improving performance in China. For the quarter, APMEA´s operating income declined 80 percent (77 percent in constant currencies) due to strategic restaurant closings and other charges and negative operating performance in Japan and China.

Kevin Ozan, McDonald´s Chief Financial Officer, noted, «We are committed to positioning the Company for long-term growth. We took a meaningful step in the first quarter with the decision to close under-performing restaurants that are not contributing to our profitability. While we continue our efforts to regain our business momentum and improve sales at our more than 36’000 restaurants around the world, our current performance reflects the ongoing pressures on the business. April global comparable sales are expected to be negative».

Easterbrook concluded, «McDonald´s founder, Ray Kroc, made a statement about our business that is as relevant today as it was 60 years ago: «Take calculated risks. Act boldly and thoughtfully. Be an agile company». McDonald´s is employing these timeless business philosophies as we embark on a turnaround to drive momentum in our business. We are committed to making McDonald´s a modern, progressive burger company delivering a contemporary customer experience».