McDonald's(US:MCD)2024-08-08 15:27Financial Performance - Revenue from company-owned and franchised restaurants for the quarter ended June 30, 2024, was $6,490 million, slightly down from $6,498 million in the same quarter of 2023[7]. - Net income for the quarter ended June 30, 2024, was $2,022 million, compared to $2,310 million for the same quarter in 2023, reflecting a decrease of approximately 12.4%[7]. - Basic earnings per share for the quarter ended June 30, 2024, was $2.81, down from $3.17 in the same quarter of 2023, a decline of about 11.4%[7]. - The company reported total expenses of $3,570 million for the quarter ended June 30, 2024, compared to $3,393 million in the same quarter of 2023, an increase of approximately 5.2%[7]. - Comprehensive income for the quarter was $2,093 million, down from $2,345 million in the previous year, reflecting a decline of 10.7%[10]. - Total revenues for the Company in the second quarter of 2024 were $6,490 million, a slight decrease of 0.1% compared to $6,498 million in the same quarter of 2023[53]. - Operating income for the Company in the second quarter of 2024 was $2,920 million, down 5.9% from $3,104 million in the same quarter of 2023[53]. - Diluted earnings per share was $2.80 for the quarter, a decrease of 11%, and $5.46 for the six months, a decrease of 2%[64]. - For Q2 2024, net income decreased by 12% to $2,022 million, and diluted earnings per share decreased by 11% to $2.80, impacted by foreign currency translation[73]. Assets and Liabilities - Total current assets decreased from $7,986 million on December 31, 2023, to $4,205 million on June 30, 2024, a decline of approximately 47.3%[6]. - Total assets decreased from $56,147 million to $53,801 million, a reduction of about 4.8%[6]. - Total current liabilities decreased from $6,859 million to $3,910 million, a decline of approximately 43.5%[6]. - Long-term debt increased from $37,153 million to $38,524 million, an increase of about 3.7%[6]. - The balance of total shareholders' equity at June 30, 2023, was $(4,999) million, reflecting a decrease from $(4,707) million at the end of the previous year[15]. - The company reported a total shareholders' equity of $(76,459) million as of June 30, 2024, reflecting a decrease from $(75,520) million at the end of the previous quarter[20]. Cash Flow and Investments - Cash provided by operations for the six months ended June 2024 was $4,079 million, slightly down from $4,094 million in the same period of 2023[12]. - Capital expenditures for the quarter were $628 million, an increase of 19.4% compared to $526 million in the same quarter of 2023[12]. - Cash used for investing activities totaled $3.3 billion for the six months ended June 30, 2024, an increase of $1.9 billion compared to the same period in 2023[101]. - The company incurred $101 million in charges related to the "Accelerating the Organization" strategy in the six months ended June 30, 2024, with an expectation of approximately $250 million in restructuring charges for the full year[32]. Revenue Growth and Expansion - The total number of systemwide restaurants increased to 42,406 as of June 30, 2024, up from 40,801 in 2023, reflecting a growth of approximately 3.9%[26]. - The Company plans to open more than 2,100 new restaurants globally in 2024, contributing to nearly 4% new unit growth[61]. - The Company aims to increase its 90-day active loyalty users to 250 million by 2027, with a target of $45 billion in annual Systemwide sales to loyalty members[61]. - Revenues from franchised restaurants for the six months ended June 30, 2024, totaled $7.663 billion, up from $7.521 billion in the same period of 2023, a 1.89% increase[51]. Market Challenges - The ongoing war in the Middle East is expected to continue negatively impacting Systemwide sales and revenue, particularly in International Developmental Licensed Markets[69]. - The competitive environment remains intense, with competition from traditional and non-traditional market participants impacting sales and profitability[112]. - Supply chain interruptions and price volatility may adversely affect costs and revenues, with potential causes including inflation and transportation issues[116]. - Labor challenges, including staffing and compliance with regulations, could negatively impact operations and customer satisfaction[119]. Tax and Regulatory Environment - The effective income tax rate for the six months ended June 30, 2024, was 20.4%, up from 19.1% in 2023[37]. - The effective income tax rate was 20.9% for the quarter ended June 30, 2024, compared to 18.0% for the same quarter in 2023[100]. - The company faces increasing regulatory and legal complexities that may adversely affect its business and financial results, including compliance costs and litigation risks[126]. Strategic Initiatives - The company plans to focus on market expansion and new product development as part of its future strategy[6]. - The Company is investing in three technology-enabled platforms to enhance customer engagement and operational efficiency[63]. - The company continues to invest in restaurant development, technology, digital engagement, and delivery to enhance customer experience[111].