McDONALD’S REPORTS THIRD QUARTER 2023 RESULTS

McDONALD’S REPORTS THIRD QUARTER 2023 RESULTS

PR Newswire

CHICAGO, Oct. 30, 2023

   -- Global Systemwide sales* increased 11% for the quarter, with global 
      comparable sales of nearly 9% and strong growth across each segment 
   -- Digital Systemwide sales in our top six markets were nearly $9 billion 
      for the quarter, representing over 40% of their Systemwide sales

CHICAGO, Oct. 30, 2023 /PRNewswire/ — McDonald’s Corporation today announced results for the third quarter ended September 30, 2023.

“With global Systemwide sales growth of 11%, our third quarter results reflect our position of strength as the industry leader,” said McDonald’s President and Chief Executive Officer, Chris Kempczinski. “The macroeconomic environment is unfolding in line with our expectations for the year, and we continued to deliver convenience and value for our customers. Thanks to the entire McDonald’s System’s outstanding execution of Accelerating the Arches, we remain confident in our future and the strategic direction of our business.”

Third quarter financial performance:

   -- Global comparable sales increased 8.8%, reflecting strong comparable 
      sales across all segments: 
          -- U.S. increased 8.1% 
          -- International Operated Markets segment increased 8.3% 
          -- International Developmental Licensed Markets segment increased 
             10.5% 
   -- Consolidated revenues increased 14% (11% in constant currencies). 
   -- Systemwide sales increased 11% (10% in constant currencies). 
   -- Consolidated operating income increased 16% (13% in constant currencies) 
      and included $26 million of pre-tax charges, primarily related to 
      restructuring costs associated with the Company's internal effort to 
      modernize ways of working (Accelerating the Organization). 
   -- Diluted earnings per share was $3.17, an increase of 18% (15% in constant 
      currencies).** 
   -- The Company declared a 10% increase in its quarterly cash dividend to 
      $1.67 per share.

1

*Refer to page 4 for a definition of Systemwide sales.

**Refer to the table on page 3 for additional details on diluted earnings per share.

COMPARABLE SALES 
                                                 Increase/(Decrease) 
                                            ------------------------------ 
                                             Quarters Ended September 30, 
                                                 2023            2022 
-----------------------------------------   --------------  -------------- 
U.S.                                            8.1 %           6.1 % 
International Operated Markets                   8.3             8.5 
International Developmental Licensed 
 Markets & Corporate                             10.5            16.7 
   Total                                        8.8 %           9.5 % 
------------------------------------------  --------------  -------------- 
   -- U.S.: Comparable sales results benefited from strong average check growth 
      driven by strategic menu price increases. Successful restaurant level 
      execution, effective marketing campaigns and continued digital and 
      delivery growth contributed to strong comparable sales results. 
   -- International Operated Markets: Segment performance was driven by strong 
      comparable sales in most markets, led by the U.K., Germany and Canada. 
   -- International Developmental Licensed Markets: The quarter reflected 
      strong comparable sales in all geographic regions. 
KEY FINANCIAL METRICS - CONSOLIDATED 
 Dollars in millions, except per share data 
                            Quarters Ended September 30,                         Nine Months Ended September 30, 
--------------  ----------------------------------------------------  ------------------------------------------------------ 
                                                      Inc/ (Dec)                                              Inc/ (Dec) 
                                                       Excluding                                               Excluding 
                                           Inc/         Currency                                   Inc/         Currency 
                       2023         2022  (Dec)      Translation              2023          2022  (Dec)      Translation 
--------------  -----------  -----------  -----      -----------      ------------  ------------  -----      ----------- 
Revenues          $ 6,692.2    $ 5,872.1     14%              11%       $ 19,087.5    $ 17,256.1     11%              11% 
Operating 
 income             3,208.3      2,763.9     16               13           8,844.8       6,788.3     30               31 
Net income          2,317.1      1,981.6     17               14           6,429.8       4,274.0     50               51 
Earnings per 
 share-diluted  $      3.17  $      2.68     18%              15%     $       8.76  $       5.75     52%              53% 
--------------  -----------  -----------  -----      -----------      ------------  ------------  -----      -----------

Results for 2023 included the following:

   -- 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, primarily related 
      to restructuring costs associated with Accelerating the Organization

Results for 2022 included the following:

   -- Pre-tax charges of $1,281 million, or $1.44 per share, for the nine 
      months, related to the sale of the Company's business in Russia 
   -- Pre-tax gain of $271 million, or $0.40 per share, for the nine months, 
      related to the Company's sale of its Dynamic Yield business 
   -- $537 million, or $0.72 per share, for the nine months, of nonoperating 
      expense related to the settlement of a tax audit in France

Excluding the above items, results for both periods reflected strong operating performance driven primarily by higher sales-driven Franchised margins.

2

NET INCOME AND EARNINGS PER SHARE-DILUTED RECONCILIATION 
 Dollars in millions, except per share data 
                                                       Quarters Ended September 30, 
-------------------  ------------------------------------------------------------------------------------------------ 
                                        Net Income                                Earnings per share - diluted 
                                                       Inc/ (Dec)                                          Inc/ (Dec) 
                                                        Excluding                                           Excluding 
                                            Inc/         Currency                               Inc/         Currency 
                          2023       2022  (Dec)      Translation            2023        2022  (Dec)      Translation 
-------------------  ---------  ---------  -----      -----------      ----------  ----------  -----      ----------- 
GAAP                 $ 2,317.1  $ 1,981.6     17%              14%     $     3.17  $     2.68     18%              15% 
   (Gains)/charges        20.0         --                                    0.02          -- 
   Tax Settlement           --         --                                      --          -- 
Non-GAAP             $ 2,337.1  $ 1,981.6     18%              15%     $     3.19  $     2.68     19%              16% 
-------------------  ---------  ---------  -----      -----------      ----------  ----------  -----      ----------- 
                                                       Nine Months Ended September 30, 
-------------------  ---------------------------------------------------------------------------------------------------- 
                                        Net Income                                Earnings per share - diluted 
                                                       Inc/ (Dec)                                          Inc/ (Dec) 
                                                        Excluding                                           Excluding 
                                            Inc/         Currency                               Inc/         Currency 
                          2023       2022  (Dec)      Translation            2023        2022  (Dec)      Translation 
-------------------  ---------  ---------  -----      -----------      ----------  ----------  -----      ----------- 
GAAP                 $ 6,429.8  $ 4,274.0     50%              51%     $     8.76  $     5.75     52%              53% 
   (Gains)/charges       168.1      770.7                                    0.23        1.04 
   Tax Settlement           --      537.2                                      --        0.72 
Non-GAAP             $ 6,597.9  $ 5,581.9     18%              19%     $     8.99  $     7.51     20%              20% 
-------------------  ---------  ---------  -----      -----------      ----------  ----------  -----      -----------

3

THE FOLLOWING DEFINITIONS APPLY TO THESE TERMS AS USED THROUGHOUT THIS RELEASE

Constant currency results exclude the effects of foreign currency translation and are calculated by translating current year results at prior year average exchange rates. Management reviews and analyzes business results excluding the effect of foreign currency translation, impairment and other charges and gains, as well as material regulatory and other income tax impacts, and bases incentive compensation plans on these results because the Company believes this better represents underlying business trends.

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