In a release dated April 25th McDonald’s Corporation, a bellwether for the QSR segment of the restaurant industry, reported results for the first quarter of FY 2023 ended March 31st 2023. For the period, the Company earned $1,802 million on total revenue of $5,898 million with a diluted EPS of $2.45. Comparable figures for the first quarter of fiscal 2022 were net income of $1,104 million on total revenue of $5,666 million with a diluted EPS of $1.48 Revenue was higher by 4.1 percent and operating margin increased from 40.8 percent in the first quarter of 2022 to 42.9 percent for the most recent quarter. Gross margin for Company-operated stores in the first quarter of 2022 fell from 14.9 percent to 13.5 percent for the most recent quarter attributed to higher costs for labor, ingredients and packaging despite increases in menu items.
In commenting on results, Chris Kempczinski, president and CEO stated, “Our Accelerating the Arches strategy is driving growth and building brand strength, delivering exceptional full-year performance in 2022 with over 10 percent comparable sales growth and 5 percent comparable guest count growth globally," He added, "While we expect short-term inflationary pressures to continue into 2023, we remain highly confident in Accelerating the Arches, which now includes a greater emphasis on restaurant openings."
For the first quarter of 2022, McDonald’s posted comparable sales growth in the U.S. of 12.6 matched by an equivalent sales growth for the international operated markets segment.
Projections for 2023 in the SEC 8K report included net restaurant expansion contributing 1.5 percent to system wide sales with an operating margin of 45 percent. On March 31st 2022 there were 40,535 McDonald’s locations with 2,118 Company-owned restaurants.
McDonald’s Corporation had a market capitalization of $212,810 million on April 27th 2023. Total assets on December 31st 2022 amounted to $50,436 million of which 42.1 percent comprised lease right-of-use assets, goodwill and intangibles. Long-term debt and lease obligation were $50,638 million. MCD has ranged over 52-weeks from $228.34 to $294.85 with a 50-day moving average of $274.90. MCD trades with a forward P/E ratio of 25.6. Prior to release MCD closed on April 24th at $291.65 and traded with a sharply declining market closing at $290.15 on Wednesday April 26th.