McDonald's Corporation announced results for the first quarter ended March 31, 2014, reflecting higher revenues compared with the prior year, while earnings per share for the quarter declined primarily due to the impact of prior year income tax benefits.
"At McDonald's, we aspire to be our customers' favorite place and way to eat and drink, and our actions are grounded in creating the best overall experience for our customers," said McDonald's President and Chief Executive Officer Don Thompson. "In the near term, we are prioritizing our efforts around those elements of the restaurant experience that are most impactful - offering the best food and beverage options and delivering outstanding service. For the long term, we are focused on more effectively leveraging consumer insights to guide our global growth priorities of optimizing our menu, modernizing the customer experience and broadening accessibility to brand McDonald's. We are intent on pursuing initiatives that will strengthen our relationship with our customers to reignite our business momentum."
First Quarter results included:
- Global comparable sales increase of 0.5% reflecting higher average check, as well as negative guest traffic in the U.S. and Asia/Pacific, Middle East and Africa (APMEA)
- Consolidated revenues increase of 1% (3% in constant currencies)
- Consolidated operating income decrease of 1% (1% increase in constant currencies)
- Diluted earnings per share of $1.21, decrease of 4% (2% in constant currencies)
- Returned $1.2 billion to shareholders through dividends and share repurchases
In the U.S., comparable sales decreased 1.7% in the first quarter, and operating income declined 3%. Top-line results for the quarter reflected negative comparable guest traffic amid challenging industry dynamics and severe winter weather. Looking ahead, the U.S. remains focused on improving the restaurant experience through a continued commitment to operations and service excellence, customer engagement and menu choice to drive sales and profitability.
During the first quarter, Europe grew comparable sales 1.4%, and operating income by 6% (4% in constant currencies). Positive sales performance in the U.K., France and Russia was partially offset by ongoing weakness in Germany. Across Europe, a combination of unique limited-time food events, premium offerings and everyday affordable pricing contributed to positive performance.
APMEA's first quarter comparable sales increased 0.8% and operating income declined 10% (2% in constant currencies). Solid comparable sales performance in China and many other markets was somewhat offset by weakness in Japan, and to a lesser extent, Australia. Ongoing premium product innovation, convenience and affordability options were sales drivers for the quarter.
Looking forward, McDonald's is focused on stabilizing key priority markets including the U.S., Germany, Australia and Japan.
Don Thompson concluded, "In today's dynamic global marketplace, our goal is to ensure that we are evolving to remain a relevant and trusted brand by serving great-tasting, high-quality, affordable food and creating memorable experiences with our brand. By leveraging a deeper understanding of what our customers want with the power of our business model, our investments in restaurant capabilities and modernization, and our hard-earned competitive advantages, we will grow McDonald's business and deliver enduring profitable growth over the long term. As we begin the second quarter, global comparable sales for the month of April are expected to be modestly positive."