McDonald’s Fourth Quarter Traffic Slows; Revenues, However, Rise 2% to $7.09 Billion

Oak Brook, Illinois, USA-headquartered McDonald's Corporation announced on January 23 that results for the fourth quarter and year ended December 31, 2013, showed higher revenues and earnings per share for both periods compared with the prior year.

Among highlight for full year 2013 results are:

  • Global comparable sales increase of 0.2% to top $28 billion, reflecting higher average check and negative comparable guest counts
  • Consolidated revenue increase of 2% (2% in constant currencies) 
  • Consolidated operating income increase of 2% (3% in constant currencies) 
  • Diluted earnings per share of $5.55, up 4% (4% in constant currencies) 
  • Return of $4.9 billion to shareholders through dividends and share repurchases

Fourth quarter resulted included:

  • Global comparable sales decrease of 0.1%, reflecting higher average check and negative comparable guest counts
  • Consolidated revenues increase of 2% (2% in constant currencies) 
  • Consolidated operating income was flat (up 1% in constant currencies) 
  • Diluted earnings per share of $1.40, up 1% (2% in constant currencies) 
  • Returned $1.3 billion to shareholders through dividends and share repurchases

In the United States, comparable sales decreased 1.4% in the fourth quarter, while operating income rose 1%. During the quarter, the US evolved its value proposition with the introduction of Dollar Menu & More and featured new limited-time food and beverage options to increase the relevance of its product offerings. Looking ahead, the segment is intent on optimizing current initiatives by strengthening its focus on menu choice, customer engagement and operations excellence to drive sales and profitability.

140123 McDonalds

For the quarter, Europe generated comparable sales growth of 1.0% and increased operating income by 3% (flat in constant currencies), as strong performance in the United Kingdom, Russia and France was partially offset by Germany. Europe continues to emphasize value menu enhancements in key markets, premium menu additions and limited-time offers, and expansion of the breakfast daypart.

Fourth quarter comparable sales in the Asia Pacific Middle East and Africa (APMEA) market declined 2.4%, and operating income fell 8% (up 1% in constant currencies), reflecting weakness in Japan and a relatively flat performance in China and Australia. To strengthen results in this key segment, APMEA is focused on accelerating growth across all dayparts with everyday affordability, locally relevant menu items, expanded conveniences and new restaurant openings.

McDonald's President and Chief Executive Officer Don Thompson commented, "The McDonald's system is pursuing the long-term opportunities that exist within the global marketplace by investing in the business to build upon the solid foundation that is already in place and drive future growth and value for our system and shareholders. For 2014, our capital expenditures are targeted at $2.9 to $3 billion, providing for 1,500 - 1,600 new restaurant openings and the reimaging of over 1,000 existing locations. Consistent with our long-standing priorities for use of cash, after investing in our business, we are committed to returning all free cash flow to shareholders over the long term, through dividends and share repurchases. For 2014, we expect to return approximately $5 billion to shareholders through dividends and share repurchases."
Thompson concluded, "As we begin 2014, global comparable sales for the month of January are expected to be relatively flat. While near-term challenges remain, we are intent on strengthening our brand to further differentiate McDonald's and become an even bigger part of our customers' lives. "