McDonald's Reports Fourth Quarter And Full Year 2014 Results

"2014 was a challenging year for McDonald's around the world. Our results declined as unforeseen events and weak operating performance pressured results in each of our geographic segments," said McDonald's President and Chief Executive Officer Don Thompson. "As we begin 2015, we are taking decisive action to regain momentum in sales, guest counts and market share. This involves driving foundational improvements in our major markets and continuing our recovery efforts in markets affected by unusual events. We are accelerating our efforts behind solutions that capitalize on the investments we're making in our technology and our restaurants to bring McDonald's Experience of the Future to life for our customers and deliver on our commitment to drive sustained, profitable growth for all stakeholders."

Full year results included:

• Global comparable sales decrease of 1.0%, reflecting negative guest traffic in all major segments
• Consolidated revenues decrease of 2% (flat in constant currencies)
• Consolidated operating income decrease of 9% (8% in constant currencies), primarily due to the impact of the previously-disclosed supplier issue in APMEA (Asia/Pacific, Middle East and Africa) and weak operating performance in the U.S.
• Effective tax rate of 35.5%, primarily due to an increase in reserves related to certain foreign tax matters
• Diluted earnings per share of $4.82, a decrease of 13% (11% in constant currencies). The following items, which total $0.54 per share, negatively impacted diluted earnings per share by 10% (10% in constant currencies) for the year:

1. $0.31 per share due to an increase in reserves related to certain foreign tax matters
2. $0.23 per share due to the estimated impact of the supplier issue resulting from lost sales and profitability in APMEA
3. Excluding the impact of these items, earnings per share for the year would have been down 3% (1% in constant currencies) compared to the prior year

• Returned $6.4 billion to shareholders through dividends and share repurchases, in connection with our $18-$20 billion, 3-year cash return target for the years 2014-2016

Fourth quarter results included:

• Global comparable sales decrease of 0.9%, reflecting negative guest traffic in all major segments
• Consolidated revenues decrease of 7% (1% in constant currencies)
• Consolidated operating income decrease of 20% (15% in constant currencies), primarily due to weak operating performance in the U.S. and the impact of the supplier issue in APMEA
• Diluted earnings per share of $1.13, a decrease of 19% (14% in constant currencies), which includes a negative impact of $0.09 per share due to the supplier issue in APMEA
• Returned $1.8 billion to shareholders through dividends and share repurchases

Complete press release (ENG)