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McDonald's Reports First Quarter 2018 Results, Menu Revamp Reaps Success

McDonald's Reports First Quarter 2018 Results, Menu Revamp Reaps Success


OAK BROOK, IL
Tuesday, May 1st, 2018

McDonald’s has been a staple for many consumers throughout the nation, but its patrons have ebbed and flowed over the years. Proving change is sometimes for the better—which can be seen in new menu option Garlic White Cheddar Burger, customers rallying for an Impossible Burger item, and many other switcheroos—the restaurant chain’s first quarter results, ending March 31st, highlight its recent successes.

Steve Easterbrook, Chief Executive Officer, McDonald's"We continued to build upon the broad-based momentum of our business, marking 11 consecutive quarters of positive comparable sales and our fifth consecutive quarter of positive guest counts," said President and Chief Executive Officer Steve Easterbrook. "More customers are recognizing that we are becoming a better McDonald's, appreciating our great tasting food, fast and friendly service, and compelling value as we execute our Velocity Growth Plan."

The U.S.’s sales increased by 2.9 percent during the first quarter—a jump the chain attributes to price increases and product mix shifts. The International Lead segment’s comparable sales hiked 7.8 percent, showing growth in all markets—especially the U.K. and Germany.

McDonald's U.S. sales increased by 2.9 percent this quarter

Further, the company reports that U.S.-based operating income increased 5 percent for the first quarter, which shows higher franchised margin dollars and higher gains on sales of restaurant business—this, however, was offset by lower company-operated margin dollars. The company’s International Lead segment’s operating income increased 21 percent, 9 percent in constant currencies, and the company says this jump was a result of sales-driven improvements in franchised margin dollars.

High Growth areas for the first quarter increased 4.7 percent, which were led by China’s and Italy’s strong performances, but the positive results can be seen, for the most part, across the board. These successes offset the company’s continued challenges in South Korea.

McDonald's Signature Garlic White Cheddar Sandwich

Foundational markets also saw an increase during the first quarter, with sales rising 8.7 percent, which can be seen in the great sales performances throughout all geographic regions.

"We're keeping the customer at the centre of everything we do as we continue enhancing their McDonald's experience. Guided by our Velocity Growth Plan, we are satisfying the rising expectations customers have for the taste and quality of our food and greater convenience as they visit our restaurants or enjoy meals delivered to their homes and offices. We are confident in the strategies guiding our business for today and for long-term sustained growth into the future,” Easterbrook continued.

McDonald's products

The company’s report boasts of the following results, according to a press release:

  • Global comparable sales increased 5.5% and global comparable guest counts increased 0.8%
  • Due to the impact of the company's strategic refranchising initiative, consolidated revenues decreased 9% (15% in constant currencies)
  • Systemwide sales increased 7% in constant currencies
  • Consolidated operating income increased 5% (flat in constant currencies) due to growth in franchised margin dollars, offset by the impact of the Company's strategic refranchising initiative
  • Diluted earnings per share of $1.72 increased 17% (12% in constant currencies), reflecting $0.07 per share of additional income tax expense associated with adjustments to the provisional amounts recorded in December 2017under the Tax Cuts and Jobs Act of 2017 ("Tax Act"). Excluding this impact, diluted earnings per share was $1.79, an increase of 22% (16% in constant currencies)
  • Returned $2.5 billion to shareholders through share repurchases and dividends

For more on the company’s first quarter, check out the press release in full here.

For more industry happenings, check back with us at Deli Market News.

McDonald's


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