MCDONALDS CORP
For the period ended Dec 31, 2024. Filed Feb 25, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 25, 2025
MCD$276.52-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-22.
0000063908-24-000072
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-25.
0000063908-25-000012
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 246 previous paragraphs and 240 current paragraphs.
146 unchanged; 74 reworded; 20 added; 25 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 21 previous and 21 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
McDonald's Corporation 2024 Annual Report 7
Current report
•Comparable sales in the U.S. increased 0.2%, benefiting from average check growth, partly offset by negative comparable guest counts.
Current report
•Comparable sales in the International Operated Markets segment decreased 0.2%, reflecting mixed results across the markets. Negative comparable sales across some markets, led by France, was partly offset by positive comparable sales in most markets.
Current report
•Comparable sales in the International Developmental Licensed Markets segment decreased 0.3%. The continued impact of the war in the Middle East and negative comparable sales in China more than offset positive comparable sales in Latin America and Japan.
Current report
•Consolidated revenues increased 2% (2% in constant currencies) to $25.9 billion.
Current report
•Systemwide sales increased 1% (2% in constant currencies) to $130.7 billion.
Current report
•Diluted earnings per share of $11.39 decreased 1% (1% in constant currencies).
Current report
FOUNDATION AND PLATFORMS
Current report
Our Strategy is aligned with the Company’s capital allocation philosophy of: (i) invest in opportunities to grow the business and drive strong returns, including both capital expenditures as well as investments in technology, digital, and our GBS organization, (ii) prioritize our dividend and (iii) repurchase shares with remaining free cash flow over time.
Current report
•Free cash flow conversion rate targeted to be in the 90% range, with the conversion percentage likely below this target during a period of heightened investments.
Current report
In the first quarter of 2024, the Company changed its rounding presentation to the nearest whole number in millions of reported amounts, except per share data or as otherwise designated. The change in rounding presentation has been applied to all prior year amounts presented. In certain circumstances, this change adjusted previously reported balances, however, these changes were not significant, and no other changes were made to previously reported financial information. Additionally, certain columns and rows in financial tables within management's discussion and analysis of financial condition and results of operations may not add due to rounding. Percentages have been calculated from the underlying whole-dollar amounts for all periods presented.
Current report
•Net pre-tax charges of $70 million, or $0.08 per share, primarily consisted of transaction costs, property sale gains and non-cash impairment charges associated with the sale of McDonald's business in South Korea and transaction costs associated with the acquisition of McDonald's business in Israel
Current report
The decrease in 2024 net income and diluted earnings per common sharewas primarily driven by higher interest expense, a higher effective tax rate and lower non-operating income, partly offset by higher sales-driven Franchised margins and lower weighted-average shares outstanding.
Current report
In 2024, total restaurant margins increased 1% (1% in constant currencies), which benefited from sales-driven growth in the International Operated Markets segment and sales-driven franchised margins in the U.S., partly offset by negative Company-owned and operated sales performance in the U.S.
Current report
Company-owned and operated margins reflected negative sales performance in the U.S. and positive sales performance in the International Operated Markets segment. Both segments were also impacted by ongoing inflationary cost pressures.
Current report
In 2024, impairment and other charges (gains), net reflected pre-tax charges of $221 million, primarily related to restructuring charges associated with the Company's internal effort to modernize ways of working (Accelerating the Organization) and net pre-tax charges of $70 million, primarily consisting of transaction costs, property sale gains and non-cash impairment charges associated with the sale of McDonald's business in South Korea and transaction costs associated with the acquisition of McDonald's business in Israel.
Current report
•Operating income increased 1% (1% in constant currencies). Excluding the current and prior year charges shown in the table above, operating income was flat (flat in constant currencies) for 2024. Results primarily reflected lower sales-driven Company-owned and operated margins in the U.S., partly offset by positive operating results in the International Operated Markets segment primarily due to sales-driven growth in Franchised margins and positive operating results in the International Developmental Licensed Markets & Corporate segment primarily due to positive sales performance.
Current report
**Refer to the Operating Income section on page 17 of the Company's Form 10-K for the year ended December 31, 2022.
Current report
Results for 2023 reflected income tax benefits primarily related to global audit progression and deferred tax adjustments.
Current report
Total assets decreased $965 million or 2% in 2024, primarily due to a decrease in Cash and equivalents driven by higher cash used for financing activities as a result of decreased net debt issuances in the current year. Net property and equipment increased $387 million in 2024, primarily due to increased capital expenditures as a result of the Company's Restaurant Development growth pillar under our Accelerating the Arches strategy.
Removed paragraphs (25)
Previous report
•Comparable sales in the U.S. increased 8.7%, benefiting primarily from strong average check growth driven by strategic menu price increases, successful menu and marketing promotions and continued digital and delivery growth.
Previous report
•Comparable sales in the International Operated segment increased 9.2%, reflecting positive comparable sales across the segment, primarily driven by the U.K., Germany and Canada.
Previous report
•Comparable sales in the International Developmental Licensed segment increased 9.4%, reflecting strong comparable sales across all geographic regions.
Previous report
•Consolidated revenues increased 10% (10% in constant currencies) to $25.5 billion.
Previous report
•Systemwide sales increased 10% (10% in constant currencies) to $129.5 billion.
Previous report
•Diluted earnings per share of $11.56 increased 39% (38% in constant currencies).
Previous report
FOUNDATION
Previous report
Developing these platforms includes continued investments in digital, innovation and the Global Business Services organization.
Previous report
The Strategy is aligned with the Company’s capital allocation philosophy of investing in opportunities to grow the business and drive strong returns, for example through new restaurants and reinvesting in existing restaurants, and returning free cash flow to shareholders over time through dividends and share repurchases.
Previous report
•Pre-tax charges of $1,281 million, or $1.44 per share, related to the sale of the Company's business in Russia
Previous report
•Pre-tax gain of $271 million, or $0.40 per share, related to the Company's sale of its Dynamic Yield business
Previous report
•$537 million, or $0.73 per share, of nonoperating expense related to the settlement of a tax audit in France
Previous report
2023 net income and diluted earnings per common share reflected strong operating performance driven primarily by higher sales-driven Franchised margins.
Previous report
In 2023, total restaurant margins increased 10% (10% in constant currencies), which reflected strong sales performance across all segments.
Previous report
Company-operated margins in the U.S. and International Operated Markets segment reflected strong sales performance, with results partly offset by ongoing inflationary cost pressures. Results in the International Operated Markets segment were also partly offset by the impact of the Company's exit from Russia in the second quarter of 2022.
Previous report
•Gains on sales of restaurant businesses
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In 2023, gains on sales of restaurant businesses increased primarily due to an increased number of restaurants sold to franchisees in the International Operated Markets segment.
Previous report
•Equity in earnings of unconsolidated affiliates
Previous report
In 2023, equity in earnings of unconsolidated affiliates increased primarily due to recovery from the impact of COVID-19 in China in the prior year.
Previous report
◦The Company incurred $40 million of accelerated restaurant closing charges, representing expenses associated with the Lease Right of Use Asset and fixed asset write-offs
Previous report
Results in 2022 reflected $1,281 million of pre-tax charges related to the sale of the Company's business in Russia and a pre-tax gain of $271 million related to the Company's sale of its Dynamic Yield business.
Previous report
•Operating Income: Operating income increased 24% (24% in constant currencies). Excluding the current year and prior year items in the table above, operating income increased 16% (16% in constant currencies) for 2023. Positive operating results across all segments were primarily due to strong sales-driven growth in Franchised margins.
Previous report
In 2022, Other (income) expense, net included $537 million of nonoperating expense related to the settlement of a tax audit in France.
Previous report
Results for 2022 reflected $239 million of net tax benefits related to the sale of the Company’s Russia and Dynamic Yield businesses and the unfavorable impact of the non-deductible $537 million of nonoperating expense related to the settlement of a tax audit in France. Excluding these items, the effective tax rate was 20.1% for the year ended 2022.
Previous report
Total assets increased $5.7 billion or 11% in 2023, primarily due to an increase in Cash and equivalents driven by higher cash from operations, as well as increased net debt issuances and decreased treasury stock purchases. Net property and equipment increased $1.1 billion in 2023, primarily due to increased capital expenditures as a result of the addition of Restaurant Development to the Company's growth pillars under our Accelerating the Arches strategy. Net property and equipment and the Lease right-of-use asset, net represented approximately 44% and approximately 24%, respectively, of total assets at year-end. Approximately 83% of total assets were in the U.S. and International Operated Markets at year-end 2023.
Reworded paragraphs (74)
Previous wording
•Comparable sales and comparable guest counts are compared to the same period in the prior year and represent sales and transactions, respectively, at all restaurants, whether operated by the Company or by franchisees, in operation at least thirteen months including those temporarily closed. Some of the reasons restaurants may be temporarily closed include reimaging or remodeling, rebuilding, road construction, natural disasters, pandemics and acts of war, terrorism or other hostilities. Restaurants in Russia were treated as permanently closed as of April 1, 2022 and therefore excluded from the calculation of comparable sales and comparable guest counts beginning in the second quarter of 2022. Comparable sales exclude the impact of currency translation and the sales of any market considered hyperinflationary (generally identified as those markets whose cumulative inflation rate over a three-year period exceeds 100%), which management believes more accurately reflects the underlying business trends. Beginning in the first quarter of 2023, McDonald's excluded results from Argentina and Lebanon in the calculation of comparable sales due to hyperinflation (Venezuela continues to be excluded). Comparable sales are driven by changes in guest counts and average check, the latter of which is affected by changes in pricing and product mix.
Current wording
•Comparable sales and comparable guest counts are compared to the same period in the prior year and represent sales and transactions, respectively, at all restaurants, whether owned and operated by the Company or by franchisees, in operation at least thirteen months including those temporarily closed. Some of the reasons restaurants may be temporarily closed include reimaging or remodeling, rebuilding, road construction, natural disasters, pandemics and acts of war, terrorism or other hostilities. Restaurants in Russia were treated as permanently closed as of April 1, 2022 and therefore excluded from the calculation of comparable sales and comparable guest counts beginning in the second quarter of 2022. Comparable sales exclude the impact of currency translation and the sales of any market considered hyperinflationary (generally identified as those markets whose cumulative inflation rate over a three-year period exceeds 100%), which management believes more accurately reflects the underlying business trends. Beginning in the first quarter of 2023, McDonald's excluded results from Argentina and Lebanon in the calculation of comparable sales due to hyperinflation (Venezuela continues to be excluded). Comparable sales are driven by changes in guest counts and average check, the latter of which is affected by changes in pricing and product mix.
Previous wording
•Systemwide sales include sales at all restaurants, whether operated by the Company or by franchisees. Systemwide sales to loyalty members is comprised of all sales to customers who self-identify as a loyalty member when transacting with both Company-operated and franchised restaurants. Systemwide sales to loyalty members are measured across approximately 50 markets with loyalty programs globally. Full year Systemwide sales to loyalty members represents an annual aggregation of quarterly sales to loyalty members active in the last 90 days. While franchised sales are not recorded as revenues by the Company, management believes the information is important in understanding the Company's financial performance because these sales are the basis on which the Company calculates and records franchised revenues and are indicative of the financial health of the franchisee base. The Company's revenues consist of sales by Company-operated restaurants and fees from franchised restaurants operated by conventional franchisees, developmental licensees and affiliates. Changes in Systemwide sales are primarily driven by comparable sales and net restaurant unit expansion.
Current wording
•Systemwide sales include sales at all restaurants, whether owned and operated by the Company or by franchisees. Systemwide sales to loyalty members is comprised of all sales to customers who self-identify as a loyalty member when transacting with both Company-owned and operated and franchised restaurants. Systemwide sales to loyalty members are measured across 60 markets with loyalty programs. Systemwide sales to loyalty members represents an aggregation of the prior four quarters of sales to loyalty members active in the last 90 days of the respective quarter. While franchised sales are not recorded as revenues by the Company, management believes the information is important in understanding the Company's financial performance because these sales are the basis on which the Company calculates and records franchised revenues and are indicative of the financial health of the franchisee base. The Company's revenues consist of sales by Company-owned and operated restaurants and fees from franchised restaurants operated by conventional franchisees, developmental licensees and affiliates. Changes in Systemwide sales are primarily driven by comparable sales and net restaurant unit expansion.
Previous wording
In 2023, global comparable sales increased 9.0%, primarily due to strong sales performance across all segments from continued execution of the Accelerating the Arches strategy.
Current wording
In 2024, global comparable sales decreased 0.1%.
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Earnings and cash flow growth rates presented below were impacted in 2023 by charges related to the company's Accelerating the Arches growth strategy, including restructuring costs associated with Accelerating the Organization, and charges related to the write-off of impaired
Current wording
Earnings and cash flow growth rates presented below were impacted in 2024 by restructuring charges associated with Accelerating the Organizationand net charges primarily consisting of transaction costs, property sale gains and non-cash impairment charges associated with the sale of McDonald's business in South Korea and transaction costs associated with the acquisition of McDonald's business in Israel. Additionally, 2023 results were impacted by charges related to the Company's Accelerating the Arches growth strategy, including restructuring charges associated with Accelerating the Organization, and charges related to the write-off of impaired software no longer in use.
Previous wording
•Consolidated operating income increased 24% (24% in constant currencies) to $11.6 billion.
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•Consolidated operating income increased 1% (1% in constant currencies) to $11.7 billion.
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•Operating margin, defined as operating income as a percent of total revenues, increased from 40% in 2022 to 46% in 2023.
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•Operating margin, defined as operating income as a percent of total revenues, decreased from 46% in 2023 to 45% in 2024.
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•Cash provided by operations was $9.6 billion, a 30% increase from the prior year.
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•Cash provided by operations was $9.4 billion, a 2% decrease from the prior year.
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•Capital expenditures of $2.4 billion were allocated approximately 50% to each of reinvestment in existing restaurants and new restaurant openings.
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•Capital expenditures of $2.8 billion were mainly allocated to new restaurant openings and, to a lesser extent, to reinvestment in existing restaurants.
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•Free cash flow was $7.3 billion, a 32% increase from the prior year.
Current wording
•Free cash flow was $6.7 billion, an 8% decrease from the prior year.
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•Across the System, over 2,000 new restaurants (including those in our developmental licensee and affiliated markets) were opened.
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•Across the System, over 2,100 new restaurants (including those in our developmental licensee and affiliated markets) were opened.
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•The Company increased its quarterly cash dividend per share by 10% to $1.67 for the fourth quarter, equivalent to an annual dividend of $6.68 per share. The Company returned a total of $7.6 billion to shareholders through dividends and share repurchases in 2023.
Current wording
•The Company increased its quarterly cash dividend per share by 6% to $1.77 for the fourth quarter, equivalent to an annual dividend of $7.08 per share. The Company returned a total of $7.7 billion to shareholders through dividends and share repurchases in 2024.
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McDonald's Corporation 2023 Annual Report 8 software no longer in use. Additionally, 2022 results were impacted by charges from the sale of the Company's business in Russia, the settlement of a tax audit in France and a gain on the sale of the Company's Dynamic Yield business.
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McDonald's Corporation 2024 Annual Report 8
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The Company’s Accelerating the Arches growth strategy (the “Strategy”) encompasses all aspects of McDonald’s business as the leading global omni-channel restaurant brand. The Strategy reflects our purpose, values and growth pillars that build on the Company’s competitive advantages. The Company's guiding purpose, mission and values are discussed in a dedicated section on page 4 of this Form 10-K.
Current wording
The Company’s Accelerating the Arches growth strategy (the “Strategy”) encompasses all aspects of McDonald’s business as the leading global omni-channel restaurant brand. Our Strategy reflects the Company’s purpose, mission and values, as well as growth pillars that build on the Company’s competitive advantages. The Company's guiding purpose, mission and values are discussed in a dedicated section on page 4 of this Form 10-K.
Previous wording
The following growth pillars, M-C-D, build on historic strengths and articulate areas of further opportunity. Under the Strategy, the Company will:
Current wording
The following growth pillars, M-C-D, build on historic strengths and articulate areas of further opportunity. Under our Strategy, the Company will:
Previous wording
•Maximize our Marketingby investing in new, culturally relevant approaches, grounded in fan truths, to effectively communicate the story of our brand, food and purpose. The Company continues to build relevance with customers through emotional connections and world class creative, which are central to the brand’s “Feel-Good Marketing” approach. This is exemplified by campaigns that elevate the entire brand and have been scaled around the globe to connect with customers in authentic and relatable ways. Another way McDonald’s connects with its customers is through personalized value and digital offers available on the McDonald’s mobile app. The Company is committed to a marketing strategy that highlights value at every tier of the menu, as affordability remains a cornerstone of the McDonald’s brand.
Current wording
•Maximize our Marketingby investing in new, culturally relevant approaches, grounded in fan truths, to effectively communicate the story of our brand, food and purpose. The Company continues to build relevance with customers through emotional connections and world class creative, which are central to the brand’s “Feel-Good Marketing” approach. This is exemplified by campaigns that elevate the entire brand and continue to be scaled around the globe to connect with customers in authentic and relatable ways. The Company is committed to a marketing strategy that highlights value at every tier of the menu, as providing delicious and affordable menu options remains a cornerstone of the McDonald’s brand. This includes everyday low-price options on our menu, affordable meal bundles, limited-time deals and personalized value and digital offers available in our mobile app.
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•Commit to the Core menu by tapping into customer demand for the familiar and focusing on serving our iconic products that are beloved by customers around the world such as our World Famous Fries, Big Mac, Quarter Pounder and Chicken McNuggets, which are a few of our seventeen unique billion-dollar brands. Building on its foundational strength with burgers, the Company will continue to evolve and innovate its longest-standing menu item with plans to implement “Best Burger”; a series of operational and formulation changes designed to deliver hotter, juicier, tastier burgers to nearly all markets by 2026. Further, the Company is focused on continuing to gain share in the rapidly growing chicken category, as the Company continues to aggressively expand its chicken brands. This includes plans to offer McCrispy in nearly all markets by the end of 2025 and to expand McCrispy into wraps and tenders in several markets. These planned innovations and new menu offerings reflect the Company’s ability to test and scale quickly to meet evolving customer preferences. The Company also continues to see a significant opportunity with coffee, demonstrated by markets leveraging the McCafé brand, customer experience, value and quality.
Current wording
•Commit to the Core menu by tapping into customer demand for the familiar and focusing on serving our iconic products that are beloved by customers around the world such as our World Famous Fries, Big Mac, Quarter Pounder and Chicken McNuggets, which are some of our seventeen unique billion-dollar brands. Building on its foundational strength with burgers, the Company will continue to evolve and innovate its longest-standing menu item with plans to implement “Best Burger”; a series of operational and formulation changes designed to deliver hotter, juicier, tastier burgers to nearly all markets by the end of 2026. Further, the Company is focused on continuing to gain share in the rapidly growing chicken category, as we continue to aggressively grow our chicken brands. This includes plans to offer the McCrispy sandwich in nearly all markets by the end of 2025 and to extend the McCrispy brand into strips and wraps in several markets. These planned innovations and new menu offerings reflect the Company’s ability to meet evolving customer preferences. The Company also continues to see a significant opportunity with beverages, such as coffee, demonstrated by markets leveraging the McCafé brand, customer experience, value and quality to drive long-term growth.
Previous wording
•Double Down on the 4D's: Digital, Delivery, Drive Thru and Restaurant Development by leveraging competitive strengths and building a powerful digital experience growth engine to deliver a personalized and convenient customer experience. To unlock further growth, the Company plans to continue to accelerate the pace of restaurant openings and technology innovation so that whenever and however customers choose to interact with McDonald’s, they can enjoy a fast, easy experience that meets their needs.
Current wording
•Double Down on the 4D's: Digital, Delivery, Drive Thru and Restaurant Development by continuing to leverage competitive strengths and building a powerful digital experience growth engine to deliver a personalized and convenient customer experience. As another way to unlock further growth, the Company plans to continue to accelerate the pace of restaurant openings and technology innovation so that whenever and however customers choose to interact with McDonald’s, they can enjoy a fast, easy experience that meets their needs.
Previous wording
◦Digital: The Company’s digital experience is transforming how customers order, pay and receive their food. Through digital tools, customers can access personalized offers, participate in a loyalty program, order through the mobile app and receive McDonald's food through the channel of their choice. In the U.S., we are piloting “Ready on Arrival”; a digital enhancement that enables crew to begin assembling a customer’s mobile order prior to their arrival at the restaurant to expedite service and elevate customer satisfaction. The Company plans to deploy this initiative across its top six markets by the end of 2025. The Company has successful loyalty programs in approximately 50 markets around the world, including its top six markets. McDonald’s loyalty customers have proven to be highly engaged, and the Company plans to increase its 90-day active users from over 150 million today to 250 million by 2027. Further, the Company plans to grow its annual Systemwide sales to loyalty members from over $20 billion today to $45 billion by 2027.
Current wording
◦Digital: The Company’s digital experience is transforming how customers order, pay and receive their food. Through digital tools, customers can access personalized offers, participate in a loyalty program, order through our mobile app and receive McDonald's food through the channel of their choice. In the U.S., we are providing increased convenience to customers through “Ready on Arrival”; a digital enhancement that enables crew to begin assembling a customer’s mobile order prior to arrival at the restaurant to expedite service and elevate customer satisfaction. The Company plans to deploy this initiative in its top six markets by the end of 2025. The Company has successful loyalty programs in 60 markets, including its top six markets. McDonald’s loyalty customers have proven to be highly engaged, and the Company plans to increase its 90-day active users to 250 million by the end of 2027. Further, the Company plans to grow its annual Systemwide sales to loyalty members to $45.0 billion by the end of 2027.
Previous wording
◦Delivery: The Company offers delivery in over 35,000 restaurants across about 100 markets, representing over 85% of McDonald's restaurants. The Company is continuing to build on and enhance the delivery experience for customers, including adding the ability to place a delivery order on the McDonald's mobile app (a feature that is available in five of the Company’s
Current wording
◦Delivery: The Company offers delivery from over 38,000 restaurants across approximately 100 markets, representing nearly 90% of McDonald's restaurants. The Company is continuing to build on and enhance the delivery experience for customers, including adding the ability to place a delivery order in our mobile app (a feature that is currently available in five of the Company’s top markets). The Company continues to scale this capability and expects to increase the percentage of Systemwide delivery sales originating from our mobile app to 30% by the end of 2027. The Company also has long-term strategic partnerships with delivery providers that continue to benefit the Company, customers and franchisees by optimizing operational efficiencies and creating a seamless customer experience.
Previous wording
◦Drive Thru: The Company is the largest drive thru player worldwide, with more than 27,000 drive thru locations globally, including nearly 95% of the approximately 13,500 locations in the U.S. This channel remains a competitive advantage in meeting customers’ demand for flexibility and choice. McDonald’s network provides unmatched scale and convenience for customers. This competitive advantage in drive thru also presents significant opportunities for growth, such as improving the physical layout of the drive thru with additional lanes, creating additional capacity, which improves speed and efficiency and ultimately leads to sales growth and strong returns. The Company continues to build on its drive thru advantage, as the vast majority of new restaurant openings in the U.S. and International Operated Market segments will include a drive thru.
Current wording
◦Drive Thru: The Company has the most drive thru locations worldwide, with nearly 28,000 drive thru locations globally, including over 95% of the over 13,500 locations in the U.S. This channel remains a competitive advantage in meeting customers’ demand for flexibility and choice. McDonald’s network currently provides unmatched scale and convenience for customers, while also offering significant growth opportunities, such as adding additional drive thru lanes to increase capacity and improve speed and efficiency. The Company continues to build on its drive thru advantage, as the vast majority of new restaurant openings in the U.S. and International Operated Markets will include a drive thru.
Previous wording
◦Restaurant Development: The Company will continue to accelerate the pace of restaurant openings to attempt to fully capture the increased demand being driven through the MCD growth pillars in many of its largest markets. In 2024, the Company plans to open more than 2,100 new restaurants across the globe, which will contribute to nearly 4% new unit growth. Accordingly, the Company will continue to build on its industry-leading development progress by targeting expansion to 50,000 restaurants by the end of 2027, which would make it the fastest period of growth in Company history.
Current wording
◦Restaurant Development: The Company will continue to accelerate the pace of restaurant openings to attempt to fully capture the demand being driven through our Strategy in many of our largest markets. In 2025, the Company plans to open about 2,200 new restaurants across the globe, which will contribute to slightly over 4% new unit growth (net of closures). Further, the Company continues to build on its industry-leading development, by progressing toward the targeted expansion to 50,000 restaurants by the end of 2027, which would make it the fastest period of restaurant unit growth in Company history.
Previous wording
McDonald's Corporation 2023 Annual Report 9 top markets). The Company is scaling this capability, expecting to increase the percentage of delivery business originating from its mobile app to 30% by 2027. The Company also has long-term strategic partnerships with delivery providers that continue to benefit the Company, customers and franchisees by optimizing operational efficiencies and creating a seamless customer experience.
Current wording
McDonald's Corporation 2024 Annual Report 9
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Foundational to the Strategy is keeping the customer and restaurant crew at the center of everything the Company does, along with a relentless focus on running great restaurants, empowering its people and continuing to modernize our ways of working through Accelerating the Organization. Further, as the Company plans for long term growth and solidifying McDonald’s leadership position, the Company will develop three platforms to build our competitive advantages, cement our place in culture and stay one step ahead of the next generation of digital customers. Together, our foundation and platforms will extend the Company’s leadership position and unlock new growth opportunities and efficiencies for our business over the long-term.
Current wording
Foundational to our Strategy is keeping the customer and restaurant crew at the center of everything the Company does, along with focusing relentlessly on running great restaurants, empowering our people and continuing to modernize our ways of working. Further, as part of the Company’s plans for long term growth and solidifying McDonald’s leadership position, the Company will continue to develop and implement three technology-enabled platforms designed to build our competitive advantages, cement our place in culture and stay one step ahead of our customers’ expectations. Together, our foundation and platforms will extend the Company’s leadership position and unlock new growth opportunities and efficiencies for our business over the long-term.
Previous wording
•Consumer: The Company is creatingone of the world’s largest consumer platforms, which will bring together the best of our brand and utilize our physical and digital competitive advantages. The consumer platform will enable the Company to accelerate growth in our loyalty program and drive valuable loyalty customers to visit more frequently.
Current wording
•Consumer: The Company is buildingone of the world’s largest consumer platforms to fuel engagement, which will bring together the best of our brand and utilize our physical and digital competitive advantages. The consumer platform will enable the Company to accelerate growth in our loyalty program and drive valuable loyalty customers to visit more frequently.
Previous wording
•Restaurant: The Company is also building the easiest and most efficient restaurant operating platform that will enable franchisees to run restaurants more efficiently and utilize the latest technology to make the crew’s jobs to deliver exceptional customer service easier. The Company will deploy new, universal software that all McDonald’s restaurants will run on, enabling restaurants to roll out innovation even faster, with less complexity and more stability; and customers will enjoy a more familiar, consistent experience.
Current wording
•Restaurant: The Company isbuilding the easiest and most efficient restaurant operating platform which enables the Company and franchisees to run restaurants more efficiently and utilize the latest cloud-based technology to make it easier for restaurant crew to deliver exceptional customer service. The Company intends to deploy new, universal software that all McDonald’s restaurants will run on, enabling restaurants to roll out innovation even faster, with less complexity and more stability; and customers will enjoy a more familiar, consistent experience.
Previous wording
•Company: The Company isbuilding a modern operating platform that will unlock speed and innovation throughout the organization, to enable further growth as it modernizes the way it works by focusing on becoming faster, more innovative and more efficient at solving problems for its customers and people.
Current wording
•Company: The Company isbuilding a modern company platform, through our Global Business Services (GBS) organization, that unlocks speed and innovation throughout the organization, to enable further growth as it modernizes the way it works by focusing on becoming faster, more innovative and more efficient at solving problems for its customers and people.
Previous wording
The Company believes the Strategy builds on its inherent strengths by harnessing its competitive advantages while leveraging its size, scale, agility and the power of the McDonald’s brand to adapt and adjust to an uncertain macro environment to meet customer demands. The Strategy is supported by a strong global senior leadership team aimed at executing against the MCD growth pillars and accelerating the Company’s broad-based business momentum.
Current wording
The Company believes our Strategy builds on our inherent strengths by harnessing the Company’s competitive advantages while leveraging its size, scale, agility and the power of the McDonald’s brand to adapt and adjust to meet customer demands in varying economic environments, including the current industry-wide challenges associated with more discerning consumer spending. Our Strategy is supported by a strong global senior leadership team aimed at executing against the MCD growth pillars, further developing our three platforms and driving long-term growth through increasing guest counts and growing industry market share.
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•The Company expects net restaurant unit expansion will contribute nearly 2% to 2024 Systemwide sales growth, in constant currencies.
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•The Company expects net restaurant unit expansion will contribute slightly over 2% to 2025 Systemwide sales growth, in constant currencies.
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•Based on current interest and foreign currency exchange rates, the Company expects interest expense for the full year 2024 to increase between 9% and 11% driven primarily by higher average interest rates and a higher average debt balance.
Current wording
•Based on current interest and foreign currency exchange rates, the Company expects interest expense for the full year 2025 to increase between 4% and 6% driven primarily by higher average debt balances and higher average interest rates.
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•The Company expects the effective income tax rate for the full year 2024 to be in the 20% to 22% range. Some volatility may result in a quarterly tax rate outside of the annual range.
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•The Company expects the effective income tax rate for the full year 2025 to be between 20% and 22%. Some volatility may result in a quarterly tax rate outside of the annual range.
Previous wording
•The Company expects 2024 capital expenditures to be between $2.5 and $2.7 billion, more than half of which will be directed towards new restaurant unit expansion across the U.S. and International Operated Markets. Globally, the Company expects to open more than 2,100 restaurants. The Company will open about 500 restaurants in the U.S. and International Operated Markets segments, and developmental licensees and affiliates will contribute capital towards more than 1,600 restaurant openings in their respective markets. The Company expects over 1,600 net restaurant additions in 2024.
Current wording
•The Company expects 2025 capital expenditures to be between $3.0 and $3.2 billion, with the majority directed towards new restaurant unit expansion across the U.S. and International Operated Markets. Globally, the Company expects to open approximately 2,200 restaurants. The Company expects to open about 600 restaurants in the U.S. and International Operated Markets segments, and that developmental licensees and affiliates will contribute capital towards about 1,600 restaurant openings in their respective markets. The Company expects nearly 1,800 net restaurant additions in 2025.
Previous wording
•The Company expects to achieve a free cash flow conversion rate in the 90% range.
Current wording
•The Company expects to achieve a free cash flow conversion rate in the low-to-mid 80% range.
Previous wording
•From the 2024 Outlook capital expenditures between $2.5 and $2.7 billion, with sequential increases of about $300 million to $500 million each year through 2027;
Current wording
•Sequential increases in capital expenditures of about $300 million to $500 million each year through 2027;
Previous wording
Beginning in the fourth quarter 2023, the Company’s Systemwide sales and revenue has been negatively impacted by the war in the Middle East, primarily in the International Developmental Licensed Markets & Corporate segment, where the majority of restaurants are under a developmental license or affiliate arrangement. The Company is monitoring the evolving situation, which it expects to continue to have a negative impact on Systemwide sales and revenue as long as the war continues. The Company generally does not invest any capital under a developmental license or affiliate arrangement, and it receives a royalty based on a percent of sales, and generally receives initial fees upon the opening of a new restaurant or grant of a new license.
Current wording
The Company’s Systemwide sales and revenue have continued to be negatively impacted by the war in the Middle East, primarily in the International Developmental Licensed Markets & Corporate segment, where the majority of restaurants are under a developmental license or affiliate arrangement. The Company is monitoring the evolving situation, which it expects to continue to have a negative impact on Systemwide sales and revenue until the war concludes and the macroeconomic conditions recover. The Company generally does not invest any restaurant capital under a developmental license or affiliate arrangement, and it receives a royalty based on a percent of sales, and generally receives initial fees upon the opening of a new restaurant or grant of a new license.
Previous wording
The impact of foreign currency translation on consolidated operating results in 2023 primarily reflected the strengthening ofthe Euro and British Pound, partly offset by the weakening of most other currencies against the U.S. dollar.
Current wording
The impact of foreign currency translation on consolidated operating results in 2024 primarily reflected the weakening of most major currencies against the U.S. Dollar, partly offset by the strengthening of the British Pound.
Previous wording
In 2023, net income increased 37% (37% in constant currencies) to $8.5 billion and diluted earnings per common share increased 39% (38% in constant currencies) to $11.56. Foreign currency translation had a positive impact of $0.04 on diluted earnings per share.
Current wording
In 2024, net income decreased 3% (2% in constant currencies) to $8.2 billion and diluted earnings per common share decreased 1% (1% in constant currencies) to $11.39. Foreign currency translation had a negative impact of $0.06 on diluted earnings per share.
Previous wording
◦The Company incurred $250 million of restructuring costs associated with Accelerating the Organization, the Company’s internal effort to modernize ways of working
Current wording
•Pre-tax charges of $221 million, or $0.25 per share primarily related to restructuring charges associated with the Company's internal effort to modernize ways of working (Accelerating the Organization)
Previous wording
•Pre-tax charges of $290 million, or $0.30 per share related to the Company's Accelerating the Arches growth strategy, including restructuring costs associated with its internal effort to modernize ways of working (Accelerating the Organization)
Current wording
•Pre-tax charges of $290 million, or $0.30 per share, related to the Company's Accelerating the Arches growth strategy, including restructuring charges associated with Accelerating the Organization
Previous wording
The Company repurchased 11.1 million shares of its stock for $3.1 billion in 2023 and 15.8 million shares of its stock for $3.9 billion in 2022.
Current wording
The Company repurchased 10.1 million shares of its stock for $2.8 billion in 2024 and 11.1 million shares of its stock for $3.1 billion in 2023.
Previous wording
The Company's revenues consist of sales by Company-operated restaurants and fees from restaurants operated by franchisees, developmental licensees and affiliates. Revenues from conventional franchised restaurants include rent and royalties based on a percent of sales with minimum rent payments, and initial fees. Revenues from restaurants licensed to developmental licensees and affiliates include a royalty based on a percent of sales, and generally include initial fees. The Company’s Other revenues are comprised of fees paid by franchisees to recover a portion of costs incurred by the Company for various technology platforms, revenues from brand licensing arrangements to market and sell consumer packaged goods using the McDonald’s brand and, for periods prior to its sale on April 1, 2022, third-party revenues for the Company's Dynamic Yield business.
Current wording
The Company's revenues consist of fees from restaurants owned and operated by franchisees, developmental licensees and affiliates and sales by Company-owned and operated restaurants. Revenues from conventional franchised restaurants include rent and royalties based on a percent of sales with minimum rent payments, and initial fees. Revenues from restaurants licensed to developmental licensees and affiliates include a royalty based on a percent of sales, and generally include initial fees. The Company’s Other revenues are comprised of fees paid by franchisees to recover a portion of costs incurred by the Company for various technology platforms, revenues from brand licensing arrangements to market and sell consumer packaged goods using the McDonald’s brand and, for periods prior to its sale on April 1, 2022, third-party revenues for the Company's Dynamic Yield business.
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Previous report — wording carried elsewhere
•Free cash flow conversion rate in the 90% range.