McDonald's Second Quarter Reflects Solid Top-Line Results,
McDonald's Second Quarter Reflects Solid Top-Line Results, Economic Headwinds And Strategic Investments
OAK BROOK, Ill., July 23, 2012 /PRNewswire/ -- McDonald's Corporation (NYSE: MCD) today announced results for the second quarter ended June 30, 2012. In constant currencies, the Company posted higher revenues, operating income and earnings per share compared with the prior year. On an as reported basis, operating income and earnings per share decreased due to the impact of foreign currency translation.
"McDonald's global comparable sales remained solid for the quarter while overall results reflected the slowing global economy, persistent economic headwinds and the investments we've made to enhance restaurant operations and provide customers the everyday value they have come to expect from McDonald's," said McDonald's Chief Executive Officer Don Thompson. "Our System alignment and ongoing commitment to our global priorities of optimizing our menu, modernizing the customer experience and broadening accessibility to our brand will help us navigate the current environment as we continue to build our business and our brand. As we begin the third quarter, global comparable sales for July are expected to be positive, but less than second quarter."
Second Quarter highlights included: •Global comparable sales increased 3.7%, with positive comparable sales in each geographic segment •Consolidated revenues of $6.9 billion were flat compared with the prior year (up 5% in constant currencies) •Consolidated operating income of $2.2 billion decreased 2% (up 3% in constant currencies) •Diluted earnings per share of $1.32, down 2% (up 3% in constant currencies) compared with the prior year, including $0.07 per share of negative currency impact •Returned $1.6 billion to shareholders through share repurchases and dividends
McDonald's U.S. generated comparable sales growth of 3.6% for the quarter leveraging the strength of its everyday value offerings, menu variety, convenience, and the enhanced customer experience due to reimaged restaurants. Top-line performance benefited from the ongoing popularity of McDonald's classic core favorites and new additions to the McCafe beverage line-up, despite broad competitive activity. Operating income for the quarter increased 2%.
For the quarter, Europe delivered comparable sales growth of 3.8% while operating income decreased 3% (increased 8% in constant currencies). Ongoing strength in the U.K. and Russia led the segment's comparable sales and constant currency operating income growth, with France and Germany also contributing. Reinvigorated everyday affordability options, ongoing premium product innovation and restaurant reimaging were key sales drivers for the quarter.
Asia/Pacific, Middle East and Africa (APMEA) posted a modest comparable sales increase of 0.9% for the quarter. Solid performance in Australia and China, partly driven by positive consumer response to value platforms, was offset by weakness in Japan. For the quarter, APMEA's operating income decreased 2% (increased 1% in constant currencies).
Don Thompson concluded, "McDonald's has a resilient business model, strong System alignment around the Plan to Win and experience in a variety of economic cycles. While the environment has become more challenging, we continue to see significant opportunities to further differentiate and grow the McDonald's brand. We have the resources and discipline to invest for the long-term benefit of our System and our shareholders."