"2008 was a strong year for McDonald's," says CEO Jim Skinner. "Through our strategic focus on menu choice, food quality and value, the average number of customers served per day increased to more than 58 million in 2008. Comparable sales and guest counts were positive across all segments for every quarter, and the Company delivered double-digit growth in operating income for the fourth quarter and the year. These accomplishments validate the strength and resilience of McDonald's Plan to Win."
Full year 2008 highlights included:
-- Global comparable sales increase of 6.9 percent, including U.S. 4.0 percent, Europe 8.5 percent, and Asia/Pacific, Middle East and Africa 9.0 percent
-- Growth in McDonald's combined operating margin of 320 basis points to 27.4 percent, after adjusting for the impact of the 2007 Latin America transaction
-- Operating income increases in the U.S. 8 percent, Europe 23 percent (17 percent in constant currencies) and Asia/Pacific, Middle East and Africa 33 percent (28 percent in constant currencies)
-- Earnings per share from continuing operations of $3.76, an increase of 16 percent (14 percent in constant currencies), after adjusting for the impact of the 2007 Latin America transaction
-- Return of $5.8 billion to shareholders through shares repurchased and dividends paid, including a 33 percent increase in the quarterly cash dividend to $0.50 per share for the fourth quarter - bringing our current annual dividend rate to $2.00 per share
Fourth quarter highlights included:
-- Global comparable sales increase of 7.2 percent, fueled by the U.S. 5.0 percent, Europe 7.6 percent and Asia/Pacific, Middle East and Africa 10.0 percent
-- Consolidated operating income increase of 11 percent (20 percent in constant currencies)
-- Earnings per share of $0.87 compared with earnings per share of $1.06 in fourth quarter 2007, which included a 2007 net benefit of $0.33 per share related to certain tax items
McDonald's U.S. delivered very strong results for the quarter and year by seizing opportunities in the key growth areas of chicken, breakfast, beverages, and convenience. Throughout 2008, the U.S. built brand loyalty by reinforcing the company's dedication to value, convenience, and menu variety with the addition of the Southern Style Chicken biscuit and sandwich, drive-thru enhancements to improve service, and ongoing expansion of McCafe specialty coffees.
In Europe, ongoing efforts to strengthen brand relevance generated impressive fourth quarter and full year results. Full year comparable sales were positive in every European market as more customers enjoyed McDonald's combination of seasonal and premium menu selections, compelling value options, and inviting restaurants.
Asia/Pacific, Middle East and Africa posted robust comparable sales and operating income growth for the quarter and year. Strong results across the segment were driven by operations excellence and a sharp focus on breakfast, convenience, and everyday affordability.
Skinner adds, "Our disciplined approach to financial management continues to be an important component of McDonald's success. We remain committed to enhancing shareholder value by investing capital prudently, optimizing our restaurant ownership mix and returning cash to shareholders. To date, we have returned $11.5 billion to shareholders through dividends and share repurchases toward our target of $15 billion to $17 billion for 2007 through 2009. For 2009, we plan to invest $2.1 billion of capital to open about 1,000 new McDonald's restaurants and reinvest in our existing locations."
Skinner concludes, "I am pleased with McDonald's 2008 results, which were achieved through the dedication of our Owner/Operators, suppliers and employees who provide an exceptional restaurant experience for our customers each and every day. McDonald's begins 2009 with six years of momentum, a business model that has delivered even in challenging economic conditions and January sales that remain strong. I am confident that our alignment behind the Plan to Win and our focus on what matters most to customers will continue to generate positive results for our System and shareholders."
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