McDonald's Corporation announced results for the first quarter ended March 31, 2013. While the company posted higher revenues and earnings per share for the quarter, comparable sales and operating income declined - affected by comparison against strong prior year results that included an additional day in 2012 due to leap year.
"McDonald's remains diligently focused on enhancing our menu, restaurants and the overall customer experience to become more relevant to today's consumers," said McDonald's President and CEO Don Thompson. "While the Company's results for the quarter reflected difficult prior year comparisons and the ongoing impact of global economic headwinds, we continue our efforts to build market share and deliver sustained profitable growth for all stakeholders."
First Quarter results included:
- Global comparable sales decreased 1.0%
- Consolidated revenues increased 1% (1% in constant currencies)
- Consolidated operating income decreased 1% (flat in constant currencies)
- Diluted earnings per share of $1.26, up 2% (3% in constant currencies)
- Returned $1.1 billion to shareholders through dividends and share repurchases
In the U.S., comparable sales decreased 1.2% in the first quarter due in part to the challenging eating-out environment. Operating income declined 3% for the quarter. Despite these results, McDonald's U.S. outperformed the competition and increased market share. During the quarter, the U.S. fortified its value leadership position with the Dollar Menu, expanded its menu variety with innovative new products and enhanced the customer experience through ongoing restaurant reimaging. Looking ahead, the U.S. is focused on menu and convenience initiatives to drive sales and restaurant profitability.
For the quarter, Europe's results were dampened by ongoing economic uncertainty. First quarter comparable sales were down 1.1%, while operating income increased 1% (up 1% in constant currency) - led by performance in the U.K. and Russia, partly offset by Germany. Moving forward, the segment's business plans emphasize building market share by featuring value across all day parts, offering compelling premium products and expanding the brand's presence through extended operating hours and new restaurant growth.
In Asia/Pacific, Middle East and Africa (APMEA), first quarter comparable sales declined 3.3% primarily due to ongoing weakness in Japan and negative results in China. The segment's quarterly operating income was down 1% (up 2% in constant currencies). McDonald's APMEA remains focused on driving performance by offering unique value platforms, accelerating growth at breakfast, and broadening accessibility through service and convenience initiatives and new restaurant development.
Thompson concluded, "We have an outstanding brand, an aligned System and an unsurpassed global infrastructure - making us uniquely well-positioned to capitalize on future growth opportunities around the world. We are committed to strengthening our business by building upon the solid foundation that is already in place. As we move forward, top-line comparisons will begin to ease while the challenging global environment and bottom-line pressures are expected to persist. For the month of April, global comparable sales are expected to be slightly negative. We are confident that we have the right plans in place to differentiate the McDonald's experience and strengthen our business momentum for the long term."
Source: McDonald’s Corp.