News

McDonald's CEO on '17 financials: 'Best comparable sales performance in 6 years'

January 30, 2018

The numbers are in for Q4 and full-year 2017 for mega-QSR, McDonald's, and the company is pleased with its results. In the fourth quarter, global comp sales increased 5.5 percent with positive guest counts in all segments, a news release said. Nevertheless, the company said that due to the impact of its strategic refranchising initiative, consolidated revenues decreased 15 percent in constant currency. 

Likewise, it said that diluted earnings per share of 87 cents dropped 42 percent in constant currency as a reflection of a net tax cost associated with the Tax Cuts and Jobs Act of 2017, totaling 84 cents per share. The company said that if the impact of the act were excluded, diluted earnings per share would have increased 16 percent or $1.71.

"2017 was a strong year for McDonald's as customers responded to the many ways we are making their experience more convenient and enjoyable," McDonald's President and CEO Steve Easterbrook said in the release. "We served more customers more often, achieved our best comparable sales performance in six years, gained share in markets around the world and made tremendous progress with growth platforms such as delivery, mobile order and pay and Experience of the Future."

Other highlights in Q4 include a systemwide sales increase of 8 percent in constant currency and consolidated operating income growth of 6 percent in constant currency.

Full year highlights include:

• Global comparable sales increased 5.3 percent.
• Consolidated revenues decreased 8 percent in constant currency.
• Systemwide sales increased 7 percent in constant currency
• Consolidated operating income increased 23 percent in constant currency, benefitting from a windfall of $850 million from the sale of the brand's China and Hong Kong businesses. 
• Diluted earnings per share increased 17 percent in constant currency.
• Quarterly dividend increased 7 percent to $1.01 beginning in the fourth quarter. 

In the U.S., fourth quarter comparable sales increased 4.5 percent largely due to strong performance of core menu items featured under the McPick 2 platform and beverage value, as well as strong consumer response to the new Buttermilk Crispy Tenders and delivery. Operating income for the quarter increased 4 percent. 

Comparable sales in the International Lead segment increased 6 percent for the quarter, led by continued momentum in the U.K. and Canada, as well as positive results across all other markets. The segment's operating income increased 7 percent in constant currency, fueled by sales-driven improvements in franchised margin dollars.