MCDONALDS CORP
For the period ended Mar 31, 2025. Filed May 12, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 12, 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-Q
Period ended 2024-09-30; filed 2024-11-07.
0000063908-24-000156
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-12.
0000063908-25-000025
Item 2. 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 233 previous paragraphs and 222 current paragraphs.
142 unchanged; 60 reworded; 19 added; 31 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 14 previous and 12 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 (19)
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
First Quarter 2025 Financial Performance
Current report
Global comparable sales decreased 1.0% (excluding Leap Day in the prior year, global comparable sales were essentially flat):
Current report
•U.S. decreased 3.6%. Comparable sales results were primarily driven by negative comparable guest counts.
Current report
•International Operated Markets decreased 1.0%. Comparable sales reflected mixed results across the markets, primarily impacted by negative comparable sales in the U.K.
Current report
•International Developmental Licensed Markets increased 3.5%. Positive comparable sales were primarily driven by the Middle East and Japan.
Current report
•Consolidated revenues decreased 3% (2% in constant currencies).
Current report
•Systemwide sales decreased 1% (increased 1% in constant currencies).
Current report
•Consolidated operating income decreased 3% (1% in constant currencies). Results reflected pre-tax charges of $66 million and $35 million for the current year and prior year, respectively, primarily related to restructuring charges associated with Accelerating the Organization. Excluding these current and prior year charges, consolidated operating income decreased (2)% (flat in constant currencies).
Current report
•Diluted earnings per share was $2.60, a decrease of 2% (1% in constant currencies). Excluding the current year charges described above of $0.07 per share, diluted earnings per share was $2.67, a decrease of 1% (increase of 1% in constant currencies) when also excluding prior year charges.
Current report
Excluding the above items, operating income performance was primarily driven by lower Franchised and Company-owned and operated margins.
Current report
•Total Franchised revenues and Company-owned and operated sales decreased 5% (3% in constant currencies). U.S. revenues reflected negative sales performance and International Operated Markets' revenues were negatively impacted by foreign currency translation. International Developmental Licensed Markets & Corporate revenues were impacted by the prior year sale of McDonald's business in South Korea, partly offset by the prior year acquisition of McDonald's business in Israel and positive sales performance.
Current report
•Franchised margins reflected negative sales performance in the U.S. and the negative impact of foreign currency translation in the International Operated Markets. International Developmental Licensed Markets & Corporate reflected positive sales performance. Franchised margins represented more than 90% of restaurant margin dollars.
Current report
•Selling, general and administrative expenses decreased $38 million or 5% (5% in constant currencies). Results primarily reflect the timing of investments in digital and technology, as well as transformation efforts, under our Accelerating the Arches strategy and the comparison to prior year costs related to the 2024 Worldwide Owner/Operator convention.
Current report
•Impairment and other charges (gains), net reflected pre-tax charges of $66 million and $35 million for the three months ended March 31, 2025 and 2024, respectively, primarily related to restructuring charges associated with Accelerating the Organization.
Current report
•Operating income decreased $87 million or 3% (1% in constant currencies). Results reflected pre-tax charges of $66 million and $35 million for the three months ended March 31, 2025 and 2024, respectively, primarily related to restructuring charges associated with Accelerating the Organization.
Current report
The increase in non-GAAP operating margin was primarily due to the prior year sale of McDonald's business in South Korea and lower Selling, general and administrative expenses, partly offset by the prior year acquisition of McDonald's business in Israel and lower Franchised and Company-owned and operated margin dollars.
Current report
Cash provided by operations totaled $2.4 billion and exceeded capital expenditures by $1.9 billion. Cash provided by operations slightly increased compared to the prior year primarily due to changes in working capital.
Current report
Cash used for financing activities totaled $1.5 billion, a decrease of $2.1 billion. The decrease was primarily due to $1.5 billion of debt issuances in the current year.
Removed paragraphs (31)
Previous report
Developing and implementing these platforms includes continued investments in digital, innovation and our Global Business Services organization.
Previous report
Our 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
Third Quarter and Nine Months 2024 Financial Performance
Previous report
Global comparable sales decreased 1.5% for the quarter and decreased 0.2% for the nine months.
Previous report
•U.S. comparable sales increased 0.3% for the quarter and 0.7% for the nine months. Comparable sales results for both periods reflect average check growth, partly offset by slightly negative comparable guest counts for the quarter and negative comparable guest counts for the nine months. Effective value and marketing campaigns featuring the core menu, successful restaurant level execution and continued digital and delivery growth contributed to slightly positive comparable sales results for both periods.
Previous report
•International Operated Markets segment comparable sales decreased 2.1% for the quarter and 0.3% for the nine months. Segment performance for the quarter was impacted by negative comparable sales across a number of markets, driven by France and the U.K. For the nine months, segment performance was driven by negative comparable sales across a number of markets, led by France.
Previous report
•International Developmental Licensed Markets segment comparable sales decreased 3.5% for the quarter and 1.7% for the nine months. 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, for both periods.
Previous report
•Consolidated revenues increased 3% (2% in constant currencies) for the quarter and increased 2% (2% in constant currencies) for the nine months.
Previous report
•Systemwide sales were flat (flat in constant currencies) for the quarter and increased 1% (1% in constant currencies) for the nine months.
Previous report
•Consolidated operating income decreased 1% (1% in constant currencies) for the quarter and was flat (flat in constant currencies) for the nine months. Excluding current and prior year charges detailed in the Operating Income and Operating Margin section on page 29 of this report, consolidated operating income increased 2% (1% in constant currencies) for the quarter and increased 1% (1% in constant currencies) for the nine months.
Previous report
•Diluted earnings per share was $3.13 for the quarter, a decrease of 1% (1% in constant currencies) and $8.59 for the nine months, a decrease of 2% (1% in constant currencies). Excluding current and prior year charges detailed in the Net Income and Diluted Earnings Per Share section on page 23 of this report, diluted earnings per share for the quarter was $3.23, an increase of 1% (1% in constant currencies) and $8.89, a decrease of 1% (1% in constant currencies) for the nine months.
Previous report
n/m Not meaningful
Previous report
For the quarter, net income decreased 3% (3% in constant currencies) to $2,255 million, and diluted earnings per share decreased 1% (1% in constant currencies) to $3.13. Foreign currency translation had a negative impact of $0.01 on diluted earnings per share.
Previous report
Results for 2024 included the following:
Previous report
•Net pre-tax charges of $52 million, or $0.05 per share, for the quarter and $142 million, or $0.15 per share, for the nine months primarily consisted of transaction costs 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
Previous report
Results for 2023 included the following:
Previous report
•Pre-tax charges of $26 million, or $0.02 per share, for the quarter and $224 million, or $0.23 per share, for the nine months related to the Company's Accelerating the Arches growth strategy, including restructuring charges associated with Accelerating the Organization
Previous report
Excluding the above items, lower Selling, general, and administrative expenses and higher Franchised margins drove positive operating income performance for the quarter. Results for the nine months reflected positive operating income performance driven primarily by higher sales-driven Franchised margins, partly offset by higher Selling, general, and administrative expenses. Results for both periods reflected higher interest expense.
Previous report
•Total Company-owned and operated sales and franchised revenues increased 2% (2% in constant currencies) for the quarter and increased 2% (2% in constant currencies) for the nine months, with both periods benefiting from sales performance in the U.S.
Previous report
and International Operated Markets segment. Revenue growth in the International Developmental Licensed Markets & Corporate segment is primarily due to the acquisition of McDonald's business in Israel, partly offset by the continued impact of the war in the Middle East, which began in October 2023.
Previous report
n/m Not meaningful
Previous report
•Franchised margins in the U.S. and International Operated Markets segment reflected sales-driven growth for both periods. Franchised margins represented approximately 90% of restaurant margin dollars.
Previous report
•Selling, general and administrative expenses decreased $33 million, or 5% (5% in constant currencies), for the quarter and increased $63 million, or 3% (3% in constant currencies), for the nine months. Results for the quarter primarily reflected lower incentive-based compensation, while the nine months primarily reflected investments in digital and technology, including transformation efforts, related to Accelerating the Organization and costs related to the 2024 Worldwide Owner/Operator convention, partly offset by lower incentive-based compensation.
Previous report
•Gains on sales of restaurant businesses decreased for the nine months, primarily due to fewer sales of restaurants in the International Operated Markets segment and in the U.S.
Previous report
•Impairment and other charges (gains), net reflected net pre-tax charges of $52 million and $142 million for the quarter and nine months, respectively, primarily consisting of transaction costs 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 and pre-tax charges of $46 million and $146 million for the quarter and nine months, respectively, related to restructuring charges associated with the Company's internal effort to modernize ways of working (Accelerating the Organization).
Previous report
Results for the quarter and nine months 2023 reflected $26 million and $224 million, respectively, of pre-tax charges related to the Company's Accelerating the Arches growth strategy, including restructuring charges associated with Accelerating the Organization.
Previous report
•Operating income decreased $20 million, or 1% (1% in constant currencies), for the quarter and decreased $1 million, or was flat (flat in constant currencies), for the nine months. Results reflected net pre-tax charges of $52 million and $142 million for the quarter and nine months, respectively, primarily consisting of transaction costs 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 and pre-tax restructuring charges of $46 million and $146 million for the quarter and nine months, respectively, related to Accelerating the Organization.
Previous report
Results for the quarter and nine months 2023 reflected $26 million and $224 million, respectively, of pre-tax charges related to the Company's Accelerating the Arches growth strategy, including restructuring charges associated with Accelerating the Organization.
Previous report
The decrease in non-GAAP operating margin was primarily due to ongoing inflationary cost pressures as well as investments in Selling, general and administrative expenses.
Previous report
Cash provided by operations totaled $6.8 billion and exceeded capital expenditures by $4.8 billion for the nine months 2024. Cash provided by operations was slightly down compared with the nine months 2023, in line with operating results.
Previous report
Cash used for financing activities totaled $5.6 billion for the nine months 2024, an increase of $1.8 billion compared with the nine months 2023. The increase was primarily due to lower issuances and higher net repayments of long term financing arrangements in the current year.
Reworded paragraphs (60)
Previous wording
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 wording
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.
Previous wording
The Company franchises and owns and operates McDonald’s restaurants, which serve a locally relevant menu of quality food and beverages in communities across more than 100 countries. Of the 42,819 McDonald's restaurants at September 30, 2024, approximately 95% were franchised.
Current wording
The Company franchises and owns and operates McDonald’s restaurants, which serve a locally relevant menu of quality food and beverages in communities across more than 100 countries. Of the 43,756 McDonald's restaurants at March 31, 2025, approximately 95% were franchised.
Previous wording
The Company’s reporting segments are aligned with its strategic priorities and reflect how management reviews and evaluates operating performance. Significant reportable segments include the United States ("U.S.") and International Operated Markets. In addition, there is the International Developmental Licensed Markets & Corporate segment, which includes the results of over 75 countries, as well as Corporate activities.
Current wording
The Company’s reporting segments are aligned with its strategic priorities and reflect how management reviews and evaluates operating performance. Significant reportable segments include the United States ("U.S.") and International Operated Markets. In addition, there is the International Developmental Licensed Markets & Corporate, which includes the results of over 75 countries, as well as Corporate activities.
Previous wording
Directly operating McDonald’s restaurants contributes significantly to the Company's ability to act as a credible franchisor. One of the strengths of the franchising model is that the expertise from Company-owned and operated restaurants allows McDonald’s to improve the operations and success of all restaurants while innovations from franchisees can be tested and, when viable, efficiently implemented across relevant restaurants. Having Company-owned and operated restaurants provides Company personnel with a venue for restaurant operations training experience. In addition, in our Company-owned and operated restaurants, and in collaboration with franchisees, the Company is able to further develop and refine operating standards, marketing concepts and product and pricing strategies that will ultimately benefit McDonald’s restaurants.
Current wording
Directly operating McDonald’s restaurants contributes significantly to the Company's ability to act as a credible franchisor. One of the strengths of the franchising model is that the expertise from Company-owned and operated restaurants allows McDonald’s to improve the operations and success of all restaurants while innovations from franchisees can be tested and, when viable, efficiently implemented across relevant restaurants. Having Company-owned and operated restaurants provides Company personnel with a venue for restaurant operations training experience. In addition, in our Company-owned and operated restaurants, and in collaboration with franchisees, the Company is able to further develop and refine operating standards, marketing concepts and product and pricing strategies.
Previous wording
The Company’s revenues consist of sales by Company-owned and operated restaurants and fees from franchised restaurants owned and operated by conventional franchisees, developmental licensees and affiliates. Fees vary by type of site, amount of Company investment, if any, and local business conditions. These fees, along with occupancy and operating rights, are stipulated in franchise/license agreements that generally have 20-year terms. 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 and revenues from brand licensing arrangements to market and sell consumer packaged goods using the McDonald’s brand.
Current wording
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. Fees vary by type of site, amount of Company investment, if any, and local business conditions. These fees, along with occupancy and operating rights, are stipulated in franchise/license agreements that generally have 20-year terms. 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 and digital platforms, and revenues from brand licensing arrangements to market and sell consumer packaged goods using the McDonald’s brand.
Previous wording
Under a developmental license or affiliate arrangement, licensees are responsible for operating and managing their businesses, providing capital (including the real estate interest) and developing and opening new restaurants. 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
Under a developmental license or affiliate arrangement, licensees are responsible for operating and managing their businesses, providing capital (including the real estate interest) and developing and opening new restaurants. 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
While developmental license and affiliate arrangements are largely the same, affiliate arrangements are used in a limited number of foreign markets (primarily China and Japan) within the International Developmental Licensed Markets & Corporate segment, as well as a limited number of individual restaurants within the International Operated Markets segment where the Company also has an equity investment and records its share of net results in equity in earnings of unconsolidated affiliates.
Current wording
While developmental license and affiliate arrangements are largely the same, affiliate arrangements are used in a limited number of foreign markets (primarily China and Japan) within the International Developmental Licensed Markets as well as a limited number of individual restaurants within the International Operated Markets, where the Company also has an equity investment and records its share of net results in equity in earnings of unconsolidated affiliates.
Previous wording
Through its size and scale, the Company embraces and prioritizes its role in and commitment to the communities in which it operates through its purpose to feed and foster communities, and its mission to make delicious feel-good moments easy for everyone. The Company is guided by five core values that define who it is and how it runs its business across the three-legged stool of McDonald's franchisees, suppliers and employees:
Current wording
Through its size and scale, the Company embraces and prioritizes its role and commitment to the communities in which it operates through its purpose to feed and foster communities, and its mission to make delicious feel-good moments easy for everyone. The Company is guided by five core values that define who it is and how it runs the business across the three-legged stool of McDonald's franchisees, suppliers and employees:
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 continue to be 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 in our mobile app. 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 along with limited-time deals for our customers.
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.
Previous 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 expand 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 coffee, demonstrated by markets leveraging the McCafé brand, customer experience, value and quality to drive long-term growth.
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 major 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 and desserts to drive long-term growth.
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 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 across its top six markets by the end of 2025. The Company has successful loyalty programs in approximately 50 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 2027. Further, the Company plans to grow its annual Systemwide sales to loyalty members 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 from over 36,000 restaurants across approximately 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 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 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
◦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 has the most drive thru locations 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 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.
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 demand being driven through our Strategy in many of our 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 (net of closures). Further, the Company continues 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 restaurant unit 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 (gross) 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
Foundational to our 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. 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.
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
•Restaurant: The Company isbuilding the easiest and most efficient restaurant operating platform which enables 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.
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 company platform 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.
Current wording
•Company: The Company isbuilding a modern company platform, through our 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 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, including both guest count-led and industry market share growth.
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.
Previous wording
In addition to the comparable sales results, the Company had the following financial results for the quarter and nine months:
Current wording
In addition to the comparable sales results, the Company had the following financial results:
Previous 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 approximately 50 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. 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.
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
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 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, 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 for the quarter primarily reflected the strengthening of the Euro and British Pound. Results for the nine months primarily reflected the weakening of most major currencies against the U.S. Dollar, partly offset by the strengthening of the British Pound and the Euro.
Current wording
The impact of foreign currency translation on consolidated operating results for the quarter primarily reflected the weakening of all major currencies against the U.S. Dollar, primarily driven by the Euro.
Previous wording
For the nine months, net income decreased 3% (3% in constant currencies) to $6,207 million, and diluted earnings per share decreased 2% (1% in constant currencies) to $8.59. Foreign currency translation had a negative impact of $0.04 on diluted earnings per share.
Current wording
Net income decreased 3% (2% in constant currencies) to $1,868 million, and diluted earnings per share decreased 2% (1% in constant currencies) to $2.60. Foreign currency translation had a negative impact of $0.04 on diluted earnings per share.
Previous wording
•Pre-tax charges of $46 million, or $0.05 per share, for the quarter and $146 million, or $0.15 per share, for the nine months related to restructuring charges associated with the Company's internal effort to modernize ways of working (Accelerating the Organization)
Current wording
Results includedpre-tax charges of $66 million, or $0.07 per share, for the three months ended March 31, 2025 and $35 million, or $0.04 per share, for the three months ended March 31, 2024, primarily related to restructuring charges associated with the Company's internal effort to modernize ways of working (Accelerating the Organization).
Previous wording
During the quarter, the Company paid a dividend of $1.67 per share, or $1.2 billion, bringing total dividends paid for the nine months to $3.6 billion. Additionally, during the quarter, the Company repurchased 1.7 million shares of stock for $444 million, bringing total purchases for the nine months to 8.3 million shares, or $2.3 billion. In September 2024, the Company declared a 6% increase in its quarterly cash dividend to $1.77 per share, payable on December 16, 2024.
Current wording
During the quarter, the Company paid a quarterly dividend of $1.77 per share, or $1.3 billion. Additionally, the Company repurchased 1.5 million shares of stock for $447 million.
Previous wording
The Company's revenues consist of sales by Company-owned and operated restaurants and fees from restaurants owned and 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 and revenues from brand licensing arrangements to market and sell consumer packaged goods using the McDonald’s brand.
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 primarily comprised of fees paid by franchisees to recover a portion of costs incurred by the Company for various technology and digital platforms and revenues from brand licensing arrangements to market and sell consumer packaged goods using the McDonald’s brand.
Previous wording
Franchised restaurants represented approximately 95% of McDonald's restaurants worldwide at September 30, 2024. The Company's heavily franchised business model is designed to generate stable and predictable revenue, which is largely a function of franchisee sales, and resulting cash flow streams. In the quarter and nine months, the Company provided an immaterial amount of assistance, including royalty relief and/or deferral of cash collection for certain franchisees impacted by the war in the Middle East in the International Developmental Licensed Markets & Corporate segment. This assistance may continue as long as the war continues.
Current wording
Franchised restaurants represented approximately 95% of McDonald's restaurants worldwide at March 31, 2025. The Company's heavily franchised business model is designed to generate stable and predictable revenue, which is largely a function of franchisee sales, and resulting cash flow streams.
Previous wording
The following table presents the percent change in comparable sales for the quarters and nine months ended September 30, 2024 and 2023:
Current wording
The following table presents the percent change in comparable sales for the three months ended March 31, 2025 and 2024:
Previous wording
The following table presents the percent change in Systemwide sales for the quarter and nine months ended September 30, 2024:
Current wording
The following table presents the percent change in Systemwide sales for the three months ended March 31, 2025:
Previous wording
Franchised sales are not recorded as revenues by the Company, but are the basis on which the Company calculates and records franchised revenues and are indicative of the financial health of the franchisee base. The following table presents Franchised sales and the related increases/(decreases) for the quarters and nine months ended September 30, 2024 and 2023:
Current wording
Franchised sales are not recorded as revenues by the Company, but are the basis on which the Company calculates and records franchised revenues and are indicative of the financial health of the franchisee base. The following table presents Franchised sales and the related increases/(decreases) for the three months ended March 31, 2025 and 2024:
Previous wording
Franchised restaurant margins are measured as revenues from franchised restaurants less franchised restaurant occupancy costs. Franchised revenues include rent and royalties based on a percent of sales, and initial fees. Franchised restaurant occupancy costs include lease expense and depreciation, as the Company generally owns or secures a long-term lease on the land and building for the restaurant location.
Current wording
Franchised restaurant margins are measured as revenues from franchised restaurants less franchised restaurant occupancy costs. Franchised restaurant occupancy costs include lease expense and depreciation, as the Company generally owns or secures a long-term lease on the land and building for the restaurant location.
Previous wording
•Company-owned and operated margins reflected positive sales performance in the U.S. and negative sales performance in the International Operated Markets segment for the quarter while the nine months benefited from positive sales performance for these two segments. The U.S. and the International Operated Markets segment were impacted by ongoing inflationary cost pressures for both periods.
Current wording
•Company-owned and operated margins in the U.S. reflected negative sales performance and the negative impact of foreign currency translation in the International Operated Markets. The U.S. and International Operated Markets were also impacted by ongoing inflationary cost pressures.
Previous wording
•Total restaurant margins included depreciation and amortization expense of $420 million and $1.2 billion for the quarter and nine months, respectively.
Current wording
•Total restaurant margins included depreciation and amortization expense of $413 million and $411 million for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
•Selling, general and administrative expenses as a percent of Systemwide sales were 2.1% for both the nine months ended 2024 and 2023.
Current wording
•Selling, general and administrative expenses as a percent of Systemwide sales were 2.2% and 2.3% for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
•Equity in earnings of unconsolidated affiliates for the nine months reflected higher equity in earnings in China as a result of the Company's increased ownership in Grand Foods Holding when compared to the same period in 2023 as well as improved operating performance in Japan.
Current wording
•Equity in earnings of unconsolidated affiliates reflected higher equity in earnings in China as a result of improved operating performance and the Company's increased ownership in Grand Foods Holding when compared to the same period in 2024.
Previous wording
*Refer to the Impairment and other charges (gains), net line within the Other Operating (Income) Expense, Net section on page 28 for details of the charges in this table.
Current wording
*Refer to the Impairment and other charges (gains), net line within the Other Operating (Income) Expense, Net section above for details of the charges in this table.
Previous wording
•Excluding the current and prior year charges shown in the table above, operating income increased 2% (1% in constant currencies) for the quarter and increased 1% (1% in constant currencies) for the nine months. Results for the nine months reflected positive operating results in the U.S. and International Operated Markets segment primarily due to sales-driven growth in Franchised margins, partly offset by higher Selling, general and administrative expenses in the International Developmental Licensed Markets & Corporate segment.
Current wording
•Excluding the charges for the three months ended March 31, 2025 and 2024 shown in the table above, operating income decreased 2% (flat in constant currencies). Results primarily reflected lower sales-driven Franchised and Company-owned and operated margins in the U.S. and International Operated Markets, partly offset by positive operating results in International Developmental Licensed Markets & Corporate primarily due to lower Selling, general, and administrative expenses.
Previous wording
•Interest expense increased 12% (12% in constant currencies) for the quarter and 13% (12% in constant currencies) for the nine months. Results for both periods reflected higher average debt balances as well as higher average interest rates.
Current wording
•Interest expense increased 1% (2% in constant currencies) primarily due to higher average debt balances as well as higher average interest rates.
Previous wording
•Interest income for both periods decreased due to lower average cash balances.
Current wording
•Interest income decreased due to lower average cash balances.
Previous wording
•The effective income tax rate was 20.7% and 20.7% for the quarters ended 2024 and 2023, respectively, and 20.5% and 19.7% for the nine months ended 2024 and 2023, respectively.
Current wording
•The effective income tax rate was 19.8% and 19.9% for the three months ended March 31, 2025 and 2024, respectively.
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Current report — wording carried from elsewhere
Our business results are subject to a variety of risks, including those that are described below and elsewhere in our filings with the