• Global Comp Sales: Decreased 0.1% for the full year; increased 0.4% in Q4.
• US Comp Sales: Decreased 1.4% in Q4 due to E. coli outbreak impact.
• Adjusted Earnings Per Share (EPS): $2.83 for Q4, a 4% decrease compared to the prior year in constant currencies.
• Adjusted Operating Margin: Just over 46% for the full year.
• Restaurant Margin Dollars: Over $14.5 billion for the year.
• Capital Expenditures (CapEx): Just under $2.8 billion for the year.
• Free Cash Flow Conversion: 81% for the year.
• Cash Returned to Shareholders: $7.7 billion through dividends and share buybacks.
• International Developmental License Segment Comp Sales: Over 4% for the quarter.
• Net Restaurant Expansion Contribution: Slightly over 2% to system-wide sales growth expected in 2025.
• Planned Restaurant Openings for 2025: Approximately 2,200 globally.

• Warning! GuruFocus has detected 4 Warning Sign with MCD.

Release Date: February 10, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• McDonald's Corp (NYSE:MCD) saw positive global comp sales growth in Q4 2024, with improvements in guest count performance.
• The company has successfully launched the McValue platform in the US, which is showing promising early results in terms of customer perception and sales.
• International markets like Canada, Germany, and Spain have shown strong performance, with positive guest count and sales growth.
• McDonald's Corp (NYSE:MCD) is on track with its Accelerating the Arches strategy, focusing on value, affordability, and menu innovation to drive growth in 2025.
• The company is making significant investments in digital and technology platforms, aiming to enhance customer experience and drive sales growth.

Negative Points

• US comp sales were negatively impacted by an E. coli outbreak linked to slivered onions, affecting Q4 2024 performance.
• The company faces ongoing pressure from low-income and family consumer segments, particularly in Europe, affecting overall sales.
• McDonald's Corp (NYSE:MCD) experienced a decrease in adjusted earnings per share by 4% in constant currencies for Q4 2024.
• The UK market has underperformed due to strong local competition and economic pressures on consumers.
• The company's free cash flow conversion for 2024 was below expectations, impacted by higher capital expenditures and top-line performance pressures.

Q & A Highlights

Q: Can you provide more details on the early customer response to the McValue platform in the US and its impact on guest count and margins? A: Christopher Kempczinski, CEO: The McValue platform is performing well, with take rates on the $5 Meal Deal and Buy 1 Add 1 for $1 meeting expectations. We've seen improvements in value perception and affordability. Ian Borden, CFO: The Buy 1 Add 1 for $1 offer is accretive to our overall check, with good margins, especially at breakfast, which has been a strong daypart for us.

Q: Could you elaborate on the US comp performance in Q4 and the trends in the International Operated Markets (IOM)? A: Christopher Kempczinski, CEO: In the US, we saw strong performance early in Q4, but the E. coli incident impacted results. We saw sequential improvement through the quarter and into Q1. In IOM, performance varies by market, with improvements in France and Canada, but challenges in the UK and Australia. Ian Borden, CFO: Pre-food safety incident, we had mid-single-digit comp sales growth. The incident impacted high-margin items like the Quarter Pounder, but we expect recovery as we regain momentum.

Q: How is McDonald's addressing the recovery from the E. coli incident in the US, and what are the expectations for comp momentum? A: Christopher Kempczinski, CEO: The E. coli impact is now localized, mainly in the Rocky Mountain region. We expect full recovery by Q2, contingent on executing our McValue platform and strong marketing. Ian Borden, CFO: Trust levels have recovered nationally, and we're focused on regaining the momentum seen at the start of Q4.

Q: Can you discuss the performance and growth expectations for new unit openings in the US and IOM? A: Ian Borden, CFO: We plan to open about 2,200 restaurants globally in 2025, with 70% in IOM and the rest in the US. We're confident in our pipeline and expect strong first-year returns. Most new units are freestanding drive-thrus, which build volume over time.

Q: What are the strategic opportunities for McDonald's beverage platform, particularly in the US? A: Christopher Kempczinski, CEO: We see significant growth potential in beverages, including coffee and emerging categories like refreshers and energy drinks. We're exploring opportunities both within existing restaurants and through new concepts like CosMc's, which is being tested in Texas.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.