McDonald's Q4 profit down 1%, income down to $1.19 billion
Staff Writer |
McDonald's Corp. reported a 1 percent decline in profit for the fourth quarter from last year on lower revenues due to the impact of refranchising.
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McDonald's posted net income for the fourth quarter of $1.19 billion, down from $1.21 billion in the prior-year quarter.
Earnings per share for the quarter rose to $1.44 from $1.31 in the year-ago period on lower weighted average shares outstanding in the latest quarter. Earnings per share rose 12 percent in constant currencies.
Total revenues for the quarter decreased 5 percent, or declined 3 percent in constant currencies, to $6.03 billion from $6.34 billion in the same quarter last year. Analysts' consensus revenue estimate was $5.99 billion.
The company attributed the decline in revenues to the impact of refranchising.
Sales by company-operated restaurants declined 9 percent from last year to $3.65 billion, while revenues from franchised restaurants increased 3 percent to $2.38 billion.
Operating income for the quarter rose 5 percent from last year to $1.97 billion.
For the fourth quarter, McDonald's global comparable sales - a metric used to gauge performance of stores open for at least one year - increased 2.7 percent, including positive comparable sales in the International Lead, High Growth and Foundational segments. This compared to an increase of 5.0 percent in the year-ago period.
On a segmental basis, U.S. comparable sales declined 1.3 percent, and operating income decreased 11 percent. This compared to a comparable sales increase of 5.7 percent in the year-ago period.
According to the company, the decline in comparable sales reflects the challenging comparison against the prior year launch of the very successful All-Day Breakfast.
Looking ahead, McDonald's president and chief executive officer Steve Easterbrook said, "As we begin the first quarter of 2017, we are mindful of the comparison we face against first quarter 2016 results, which benefited from leap year, favourable weather and continued momentum from All-Day Breakfast in the U.S." ■