McDonald's Reports Second Quarter 2021 Results

– Global comparable sales were up 40.5% in the second quarter and increased 6.9% on a 2-year basis, reflecting sequential acceleration and continued broad-based business momentum – Comparable sales increased across all segments on a 2-year basis

McDonald’s Corporation today announced results for the second quarter ended June 30, 2021.

“Our performance is a continued demonstration of the broad-based strength and resiliency of our business as global comp sales in the second quarter increased nearly 7% over 2019. For 65 years, we’ve created iconic experiences for billions of people around the world. Along the way, we’ve always focused on following our customers’ needs, finding the most convenient and engaging ways for them to enjoy McDonald’s. It’s clear that our next chapter will be driven by our leadership in digital,” said McDonald’s President and Chief Executive Officer Chris Kempczinski. “As we build on our momentum and embed our digital capabilities through the customer experience, I’m thrilled that Manu Steijaert will be taking on the newly created role of Chief Customer Officer. His team will deliver the seamless omnichannel experience that our customers want and McDonald’s can provide.”

Second quarter financial performance:

  • Global comparable sales increased 40.5% (6.9% on a 2-year basis), reflecting positive comparable sales across all segments:
    • U.S. increased 25.9% (14.9% on a 2-year basis)
    • International Operated Markets segment increased 75.1% (2.6% on a 2-year basis)
    • International Developmental Licensed Markets segment increased 32.3% (0.3% on a 2-year basis)
  • Consolidated revenues increased 57% (49% in constant currencies) to $5,888 million.
  • Systemwide sales increased 48% (42% in constant currencies) to $28,281 million.
  • Consolidated operating income increased $1,730 million and included $98 million of strategic gains primarily related to the sale of McDonald’s Japan stock.
  • Diluted earnings per share for the quarter was $2.95, or $2.37 excluding $0.48 per share of income tax benefits as a result of a change in the U.K. statutory income tax rate and $0.10 per share of strategic gains.

COMPARABLE SALES

Increase/(Decrease)

Quarters Ended June 30,

2021

2020

U.S.

25.9%

(8.7)%

International Operated Markets

75.1

(41.4)

International Developmental Licensed Markets & Corporate

32.3

(24.2)

Total

40.5%

(23.9)%

COVID-19 resurgences throughout the quarter and six months have resulted in instances of government restrictions on restaurant operating hours, limited dine-in capacity and, in some cases, dining room closures. The Company has continued to follow the guidance of expert health authorities to apply the appropriate precautionary measures to protect the health and safety of our people and our customers and expects some operating restrictions in various markets so long as the COVID-19 pandemic continues.

  • Comparable Sales: Quarterly comparable sales and guest counts were positive across all segments. Comparable sales were impacted in both periods (to a greater extent in 2020) by COVID-19.
    • U.S.: Comparable sales results benefited from strong average check growth driven by larger order size and menu price increases. The Crispy Chicken Sandwich and BTS Famous Order promotion, as well as growth in delivery and digital platforms, contributed to the comparable sales growth. Comparable sales increased 14.9% on a 2-year basis, reflecting continued momentum.
    • International Operated Markets: Results reflected strong positive comparable sales in the U.K. and France as well as positive comparable sales across the entire segment due to significantly fewer restaurant closures and the easing of COVID-19 restrictions. Comparable sales increased 2.6% on a 2-year basis, reflecting positive 2-year comparable sales in the U.K., Australia and Canada and negative 2-year comparable sales in France and Germany.
    • International Developmental Licensed Markets: The strong quarterly comparable sales were primarily driven by Brazil, Japan and China, along with positive comparable sales across all regions. Comparable sales increased 0.3% on a 2-year basis.

KEY FINANCIAL METRICS – CONSOLIDATED
Dollars in millions, except per share data

Quarters Ended June 30,

Six Months Ended June 30,

2021

2020

Inc/
(Dec)

Inc/ (Dec)
Excluding
Currency
Translation

2021

2020

Inc/ (Dec)

Inc/ (Dec)
Excluding
Currency
Translation

Revenues

$

5,887.9

$

3,761.5

57%

49%

$

11,012.5

$

8,475.9

30%

25%

Operating income

2,691.1

961.1

n/m

n/m

4,972.4

2,654.7

87

79

Net income

2,219.3

483.8

n/m

n/m

3,756.5

1,590.7

n/m

n/m

Earnings per share-diluted

$

2.95

$

0.65

n/m%

n/m%

$

5.00

$

2.12

n/m%

n/m%

n/m Not meaningful

Results for the quarter and six months reflected stronger operating performance across all segments due to higher sales-driven restaurant margins as a result of fewer restaurant closures and the easing of COVID-19 restrictions compared with the prior year.

Results for the quarter included the following:

  • Net pre-tax strategic gains of $98 million, or $0.10 per share, primarily related to the sale of McDonald’s Japan stock
  • $364 million, or $0.48 per share, of income tax benefits related to deferred tax adjustments as a result of a change in the U.K. statutory income tax rate

Results for the six months included the following:

  • Net pre-tax strategic gains of $233 million, or $0.23 per share, primarily related to the sale of McDonald’s Japan stock
  • $364 million, or $0.48 per share, of income tax benefits related to deferred tax adjustments as a result of a change in the U.K. statutory income tax rate

Foreign currency translation benefited diluted earnings per share by $0.13 for the quarter and $0.19 for the six months.

EARNINGS PER SHARE-DILUTED RECONCILIATION 

Quarters Ended June 30,

Six Months Ended June 30,

2021

2020

Inc/
(Dec)

Inc/ (Dec)
Excluding
Currency
Translation

2021

2020

Inc/
(Dec)

Inc/ (Dec)
Excluding
Currency
Translation

GAAP earnings per share-diluted

$

2.95

$

0.65

n/m%

n/m%

$

5.00

$

2.12

n/m%

n/m%

Strategic (gains) charges

(0.10)

0.01

(0.23)

0.01

Income tax benefits

(0.48)

(0.48)

Non-GAAP earnings per share-diluted

$

2.37

$

0.66

n/m%

n/m%

$

4.29

$

2.13

n/m%

n/m%

n/m Not meaningful

ABOUT McDONALD’S

McDonald’s is the world’s leading global foodservice retailer with over 39,000 locations in over 100 countries. Approximately 93% of McDonald’s restaurants worldwide are owned and operated by independent local business owners.

McDONALD’S CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)

Dollars and shares in millions, except per share data

Quarters Ended June 30,

2021

2020

Inc/ (Dec)

Revenues

Sales by Company-operated restaurants

$

2,488.7

$

1,593.7

$

895.0

56%

Revenues from franchised restaurants

3,306.2

2,088.0

1,218.2

58

Other revenues

93.0

79.8

13.2

17

TOTAL REVENUES

5,887.9

3,761.5

2,126.4

57

Operating costs and expenses

Company-operated restaurant expenses

2,021.0

1,448.4

572.6

40

Franchised restaurants-occupancy expenses

579.1

524.5

54.6

10

Other restaurant expenses

68.3

63.3

5.0

8

Selling, general & administrative expenses

Depreciation and amortization

83.1

71.0

12.1

17

Other

572.4

576.0

(3.6)

(1)

Other operating (income) expense, net

(127.1)

117.2

(244.3)

n/m

Total operating costs and expenses

3,196.8

2,800.4

396.4

14

OPERATING INCOME

2,691.1

961.1

1,730.0

n/m

Interest expense

296.5

319.1

(22.6)

(7)

Nonoperating (income) expense, net

18.6

(6.7)

25.3

n/m

Income before provision for income taxes

2,376.0

648.7

1,727.3

n/m

Provision for income taxes

156.7

164.9

(8.2)

(5)

NET INCOME

$

2,219.3

$

483.8

$

1,735.5

n/m

EARNINGS PER SHARE-DILUTED

$

2.95

$

0.65

$

2.30

n/m

Weighted average shares outstanding-diluted

752.1

748.6

3.5

0%

n/m Not meaningful

McDONALD’S CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)

Dollars and shares in millions, except per share data

Six Months Ended June 30,

2021

2020

Inc/ (Dec)

Revenues

Sales by Company-operated restaurants

$

4,650.2

$

3,619.5

$

1,030.7

28%

Revenues from franchised restaurants

6,183.6

4,696.0

1,487.6

32

Other revenues

178.7

160.4

18.3

11

TOTAL REVENUES

11,012.5

8,475.9

2,536.6

30

Operating costs and expenses

Company-operated restaurant expenses

3,838.6

3,201.2

637.4

20

Franchised restaurants-occupancy expenses

1,150.6

1,078.7

71.9

7

Other restaurant expenses

135.5

128.8

6.7

5

Selling, general & administrative expenses

Depreciation and amortization

159.1

144.5

14.6

10

Other

1,062.8

1,092.3

(29.5)

(3)

Other operating (income) expense, net

(306.5)

175.7

(482.2)

n/m

Total operating costs and expenses

6,040.1

5,821.2

218.9

4

OPERATING INCOME

4,972.4

2,654.7

2,317.7

87

Interest expense

596.5

599.1

(2.6)

0

Nonoperating (income) expense, net

47.2

(38.0)

85.2

n/m

Income before provision for income taxes

4,328.7

2,093.6

2,235.1

n/m

Provision for income taxes

572.2

502.9

69.3

14

NET INCOME

$

3,756.5

$

1,590.7

$

2,165.8

n/m

EARNINGS PER SHARE-DILUTED

$

5.00

$

2.12

$

2.88

n/m

Weighted average shares outstanding-diluted

751.6

749.6

2.0

0%

n/m Not meaningful

SOURCE McDonald’s Corporation