McDonald´s: Reports Growth In Q4 And Full Year 2012

Oak Brook / IL. (mdc) McDonald´s Corporation announced results for the fourth quarter and year ended December 31, 2012, reflecting higher revenues, operating income and earnings per share compared with the prior year.

«Throughout 2012 we concentrated our efforts behind the global priorities that represent our greatest opportunities under the Plan to Win — optimizing our menu, modernizing the customer experience and broadening accessibility to our Brand», said McDonald´s Chief Executive Officer Don Thompson. «McDonald´s continued to grow by remaining focused on what matters most to our customers, although our results reflect the impact of the challenging global operating, economic and competitive environment. Our overall performance is a testament to the underlying strength of our business and our dedicated System of franchisees, suppliers and employees who continue to drive toward our mission to become our customers´ favorite place and way to eat and drink».

Full year 2012 highlights included:

  • Global comparable sales increased 3,1 percent, with the U.S. up 3,3 percent, Europe up 2,4 percent and Asia/Pacific, Middle East and Africa (APMEA) up 1,4 percent
  • Consolidated revenues up two percent (five percent in constant currencies)
  • Consolidated operating income increase of one percent (four percent in constant currencies), with the U.S. up two percent, Europe down one percent (up six percent in constant currencies) and APMEA up three percent (three percent in constant currencies)
  • Diluted earnings per share of 5,36 USD, up two percent (five percent in constant currencies)
  • Returned 5,5 billion USD to shareholders through dividends and share repurchases

Fourth Quarter highlights included:

  • Global comparable sales increased 0,1 percent
  • Consolidated revenues increased two percent (two percent in constant currencies)
  • Consolidated operating income increase of four percent (four percent in constant currencies)
  • Diluted earnings per share of 1,38 USD, up four percent (five percent in constant currencies)

McDonald´s U.S. generated positive comparable sales and operating income results for the year despite ongoing economic and competitive pressures. Fourth quarter comparable sales increased 0,3 percent and operating income was relatively flat against strong prior year results. During the quarter, the U.S. focused on enhancing its value leadership position by balancing strong everyday value messaging with affordable and compelling premium menu options.

For the year, Europe delivered comparable sales and constant currency operating income growth despite ongoing economic uncertainty throughout the segment. During the fourth quarter, Europe´s operating income rose five percent (up seven percent in constant currencies) while comparable sales were down 0,6 percent due to negative comparable guest counts and strong prior year performance. The U.K. and Russia were key contributors to the segment´s operating income performance for both periods. Emphasis on unique promotional food events, expanded value offerings and restaurant reimaging continued to provide an appealing customer experience and supported the segment´s results.

For the year, APMEA generated positive comparable sales and operating income growth. APMEA´s fourth quarter comparable sales declined 1,7 percent and operating income was flat (down one percent in constant currencies) against strong prior year results. Positive quarterly sales and operating results in Australia were more than offset by ongoing weakness in Japan and other markets. Throughout APMEA, consumers continued to respond to the segment´s compelling value platforms, great tasting premium menu selections and relevant convenience.

Don Thompson continued, «As we begin the new year, our average annual long-term targets in constant currency remain intact: Systemwide sales growth of three percent to five percent, operating income growth of six percent to seven percent, and return on incremental invested capital in the high teens. We believe these targets remain realistic and sustainable for a company of our size and maturity. In 2013, we plan to invest about 3,2 billion USD of capital to open between 1’500 and 1’600 new McDonald´s restaurants and to reinvest in our existing locations, including reimaging more than 1’600 locations worldwide. We are confident that now is an opportune time to invest in our restaurant portfolio in ways that will yield value for all stakeholders in the future».

Don Thompson concluded, «Moving forward, we remain focused on seizing the long-term opportunities in the global marketplace by leveraging our competitive advantages. We have a brand advantage in convenience, menu variety and value, a resilient business model, and the experience and alignment throughout the McDonald´s System to navigate the current environment. For the near-term we expect top and bottom-line growth to remain pressured, with January´s global comparable sales expected to be negative».

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