China boost for McDonald’s appetite
In this article (5)
A strong performance in China, partly offset by continued challenges in South Korea, helped build first-quarter momentum for McDonald’s Corporation.
President/CEO Steve Easterbrook says the restaurant group has had 11 consecutive quarters of positive comparable sales and a fifth consecutive quarter of positive guest counts.
Highlights for the first quarter, to the end of March, included a 5.5 per cent rise in global comparable sales and 0.8 per cent in global comparable guest counts.
A strategic refranchising initiative resulted in consolidated revenues dropping 9 per cent (15 per cent in constant currencies).
Systemwide sales increased 7 per cent in constant currencies, while consolidated operating income increased 5 per cent (flat in constant currencies) because of growth in franchised margin dollars, offset by the impact of the refranchising initiative
Comparable sales for the international lead segment increased 7.8 per cent for the quarter, reflecting positive results across all markets. The segment’s operating income grew 21 per cent (9 per cent in constant currencies), fuelled by sales-driven improvements in franchised margin dollars.
Questions & Answers
Q.What specifically contributed to the 9% drop in McDonald's consolidated revenues?
What specifically contributed to the 9% drop in McDonald's consolidated revenues?
The drop in consolidated revenues was a direct result of a strategic refranchising initiative. In constant currencies, this revenue decrease was even larger, at 15%.
Q.How did the refranchising initiative impact consolidated operating income for McDonald's?
How did the refranchising initiative impact consolidated operating income for McDonald's?
While consolidated operating income increased by 5%, the refranchising initiative offset growth in franchised margin dollars. This meant operating income remained flat when measured in constant currencies.
Q.Which specific markets were mentioned as having positive results within the international lead segment?
Which specific markets were mentioned as having positive results within the international lead segment?
The article states that the 7.8% increase in comparable sales for the international lead segment reflected positive results across all markets within that segment, though no specific countries beyond China were named.
Q.Despite challenges in South Korea, what was the overall performance of McDonald's in terms of comparable sales and guest counts?
Despite challenges in South Korea, what was the overall performance of McDonald's in terms of comparable sales and guest counts?
McDonald's achieved its 11th consecutive quarter of positive comparable sales, up 5.5% globally, and its fifth consecutive quarter of positive guest counts, which rose by 0.8% globally.
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