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McDonald’s Reports Second Quarter 2024 Financial Results: Global Sales Decline Slightly Amid Strategic Shifts
July 29, 2024, Chicago, IL — McDonald’s Corporation (NYSE: MCD) today announced its financial results for the second quarter ended June 30, 2024. The global fast-food giant reported consolidated revenues of nearly $6.5 billion, marking a 1% increase in constant currencies compared to the previous year. Despite this, global comparable sales saw a decline of 1.0%, reflecting a challenging economic environment and strategic shifts within the company.
Key Financial Highlights:
- Revenues: Consolidated revenues remained flat, amounting to $6.5 billion, with a 1% increase in constant currencies.
- Operating Income: Consolidated operating income decreased by 6% (5% in constant currencies) to $2.92 billion, impacted by pre-tax non-cash impairment charges of $97 million and restructuring charges of $57 million.
- Net Income: Net income for the quarter stood at $2.022 billion, down 12% from the previous year.
- Earnings Per Share: Diluted earnings per share were $2.80, an 11% decline. Excluding charges, EPS was $2.97, a decrease of 6% in constant currencies.
Segment Performance:
- U.S. Market: Comparable sales decreased by 0.7%, influenced by negative guest counts. However, strategic menu price increases and digital and delivery growth provided some offset.
- International Operated Markets: This segment saw a 1.1% decrease in comparable sales, primarily driven by negative performance in France.
- International Developmental Licensed Markets: Sales decreased by 1.3%, with the ongoing conflict in the Middle East and negative sales in China outweighing positive results in Latin America and Japan.
Strategic Insights and Leadership Commentary:
Chris Kempczinski, Chairman and CEO of McDonald’s, emphasized the company’s strategic focus: “We are confident that Accelerating the Arches is the right playbook for our business. As consumers are more discriminating with their spend, we are focused on delivering reliable, everyday value and accelerating growth drivers like chicken and loyalty.”
Loyalty Program Success:
Systemwide sales to loyalty members across 50 markets reached over $26 billion for the trailing twelve-month period, with approximately $7 billion for the quarter. This highlights the success and growing importance of McDonald’s loyalty programs in driving customer engagement and sales.
Detailed Financial Metrics:
- Revenues from Company-Owned Restaurants: $2.461 billion, down 1%.
- Revenues from Franchised Restaurants: Slight increase to $3.940 billion.
- Operating Costs and Expenses: Total costs rose to $3.570 billion, driven by higher Selling, General, and Administrative expenses.
Challenges and Opportunities:
The company faced several challenges, including higher interest expenses and a higher effective tax rate. However, McDonald’s continues to invest in its strategic growth areas and modernizing its operations to enhance efficiency and long-term profitability.
Source: MCD
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