Operations
McDonald's Q4 was brand's strongest of 2020
January 29, 2021
In its fourth quarter, ending Dec. 31, 2020, McDonald's delivered its strongest financial performance of the extraordinary year of 2020, when the brand said it was able to recover almost 99% of Q4 2019 global comp sales, according to the Chicago-based QSR's latest financial report.
Fourth-quarter U.S. comparable sales were 5.5% and 0.4% for the year, marking six consecutive years of positive comparable sales.
"2020 will be remembered as one of McDonald's most challenging, yet inspiring, moments in our long history," Chris Kempczinski, McDonald's president and CEO, said in the release. "The resilience of the McDonald's System was on display — making safety and service a priority, putting our customers and people first, and running great restaurants
"Against an uncertain backdrop, we are committed to staying true to our values and our brand purpose to feed and foster communities. By investing for the future and leveraging competitive strengths within our Accelerating the Arches strategy in drive-thru, delivery and our growing digital presence, we're confident we can continue to capture market share and drive long-term sustainable growth for all stakeholders."
Key highlights of McDonald's four-quarter financial performance include:
- Global comparable sales declined 1.3% while improving from the prior quarter, reflecting positive comparable sales in the U.S. of 5.5%, and negative comparable sales in the International Operated segment and International Developmental Licensed segment of 7.4% and 3.6%, respectively.
- Consolidated revenues decreased 2% (3% in constant currencies).
- Systemwide sales increased 1% (flat in constant currencies).
- Consolidated operating income decreased 7% (9% in constant currencies), including $142 million of strategic gains primarily related to the sale of McDonald's Japan stock. Excluding these gains, operating income decreased 13% (15% in constant currencies).
- Diluted earnings per share of $1.84 decreased 12% (13% in constant currencies). Excluding $0.14 per share of current year strategic gains primarily related to the sale of McDonald's Japan stock, diluted earnings per share was $1.70 for the quarter, a decrease of 14% (15% in constant currencies) when also excluding $0.11 per share of prior year income tax benefit due to regulations issued in the fourth quarter of 2019.
Full year financial performance:
- Global comparable sales declined 7.7%, reflecting positive comparable sales in the U.S. of 0.4%, and negative comparable sales in the International Operated segment and International Developmental Licensed segment of 15% and 10.5%, respectively.
- Consolidated revenues decreased 10% (10% in constant currencies).
- Systemwide sales decreased 7% (7% in constant currencies).
- Consolidated operating income decreased 19% (20% in constant currencies) and included $268 million of net strategic gains. Excluding these items, operating income decreased 23%, when also excluding $74 million of net strategic charges from the prior year.
- Diluted earnings per share of $6.31 decreased 20%.
The performance missed analysts earnings and sales expectations, with revenue down 2% to $5.3 billion, off of the prediction of $5.4 billion. McDonald's has about 38,700 stores globally, with about 14,000 of those locations in the U.S.
