On February 10, 2025, McDonald's Corp (MCD, Financial) released its 8-K filing detailing the financial results for the fourth quarter and full year of 2024. As the largest restaurant owner-operator globally, McDonald's operates nearly 42,000 stores across 115 markets, generating system sales of $130 billion in 2023. The company primarily earns revenue through franchise royalty fees and lease payments, supplemented by sales from company-operated stores in the U.S., internationally operated markets, and international developmental/licensed markets.
McDonald's reported a diluted earnings per share (EPS) of $2.80 for the fourth quarter, which was below the analyst estimate of $2.85. The company's revenue for the quarter was $6,388 million, slightly under the estimated $6,442.29 million. For the full year, McDonald's EPS was $11.39, falling short of the annual estimate of $11.47. The revenue of $25,920 million was close to the estimated $26,002.31 million.
The company's global comparable sales increased by 0.4% in the fourth quarter, with a notable decline of 1.4% in the U.S. market. This decline was attributed to a decrease in average check size, partially offset by a slight increase in guest counts. The International Operated Markets segment saw a marginal increase of 0.1%, while the International Developmental Licensed Markets segment experienced a 4.1% rise, driven by strong performance in the Middle East and Japan.
Despite challenges, McDonald's achieved significant milestones. The company's global systemwide sales surpassed $130 billion for the year, with a growth of over $1 billion. Sales to loyalty members reached approximately $30 billion for the year, marking a 30% increase over the previous year. These achievements underscore the importance of customer loyalty and market share expansion in the competitive restaurant industry.
McDonald's consolidated revenues remained flat for the fourth quarter, while systemwide sales increased by 2%. Operating income rose by 2%, with a 3% increase in constant currencies. However, when excluding net charges, operating income decreased by 2%. The company's net income for the quarter was $2,017 million, a slight decrease from $2,039 million in the previous year.
For the full year, McDonald's reported a 2% increase in consolidated revenues and a 1% rise in systemwide sales. Operating income increased by 1%, but net income decreased by 3% to $8,223 million. The company's free cash flow, a critical metric for evaluating its ability to generate cash after capital expenditures, was impacted by restructuring charges and transaction costs.
“Accelerating the Arches continues to be the right strategy as we focus on growing market share,” said Chairman and CEO Chris Kempczinski. “We’re playing to win, focusing on our customers with outstanding value, exciting menu innovation and culturally relevant marketing.”
| Metric | Q4 2024 | Q4 2023 | Change |
|---|---|---|---|
| Revenues | $6,388 million | $6,406 million | -0.3% |
| Operating Income | $2,868 million | $2,802 million | +2% |
| Net Income | $2,017 million | $2,039 million | -1% |
| Diluted EPS | $2.80 | $2.80 | 0% |
McDonald's Corp (MCD, Financial) faced a challenging year with mixed results across its markets. While the company achieved significant sales growth and maintained strong customer loyalty, it fell short of analyst expectations for earnings per share. The company's strategic focus on market share expansion and customer engagement remains crucial as it navigates the competitive landscape of the global restaurant industry. Investors and stakeholders will be keen to see how McDonald's adapts its strategies to address these challenges and capitalize on growth opportunities in the coming year.
Explore the complete 8-K earnings release (here) from McDonald's Corp for further details.
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