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Thu 26th Jul 2018 - UK drives 4.9% like-for-like sales growth in McDonald’s key international markets
UK drives 4.9% like-for-like sales growth in McDonald’s key international markets: McDonald’s has reported global like-for-like sales rose 4% in second quarter ended June 30, 2018 – consensus forecast by analysts was 3.6%. The “international lead” segment saw 4.9% like-for-like sales growth, “primarily driven by the UK and France”. Chief executive Steve Easterbrook said: “We’re seeing good performance across our business as our customers tell us that they value and appreciate the moves we’re making to elevate the McDonald’s experience. We’re pleased with the results of our international business and the progress we’re making in the US on executing on our Velocity Growth Plan priorities. We’ve now marked 12 consecutive quarters of positive comparable sales, and we are confident that we’re executing the right strategy to achieve long-term, profitable growth.” Due to the impact of the company’s strategic refranchising initiative, consolidated revenues decreased 12% (14% in constant currencies). Consolidated operating income decreased 1% (4% in constant currencies), primarily due to $92 million of strategic restructuring charges ($85 million related to the previously disclosed restructuring charge for the US business). Excluding these charges, as well as unrelated strategic charges in the prior year, consolidated operating income increased 2% (decreased 1% in constant currencies). Diluted earnings per share of $1.90 increased 12% (9% in constant currencies), reflecting $0.09 per share of strategic restructuring charges. Excluding these charges, diluted earnings per share was $1.99, an increase of 15% (12% in constant currencies) over prior year earnings per share (excluding $0.03 per share of prior year strategic charges). The company returned $2.5 billion to shareholders through share repurchases and dividends. In the US, second quarter like-for-like sales increased 2.6% driven by growth in average check resulting from both product mix shifts and menu price increases. Operating income for the quarter decreased 7% primarily due to the strategic restructuring charge. Excluding this charge, operating income increased 1% as higher franchised margin dollars were partly offset by lower company-operated margin dollars. The International Lead segment’s operating income increased 15% (9% in constant currencies), fueled by sales-driven improvements in franchised margin dollars. In the High Growth segment, second quarter comparable sales increased 2.4%, led by strong performance in Italy and positive results across most of the segment, partly offset by continued challenges in South Korea. In the Foundational markets, second quarter comparable sales rose 6.8%, reflecting positive sales performance across all geographic regions. Easterbrook added: “We remain focused on delivering the most enjoyable experience for every customer, every visit. Whether that is when they visit a modernised restaurant with inviting hospitality or through the convenience of having delicious food delivered to their home, we know that our fundamental day-to-day commitment to our customers is running great restaurants.” Revenue was $5.35bn, beating forecast by $30m. The refranchising initiative means company stores are franchised and McDonald’s earns royalties; it swaps turnover for smaller royalty income so whilst overall turnover goes down royalty income equates largely to pre-central overhead profit.

Women’s Entrepreneur Conference six weeks away: Propel has partnered with Elliotts chief executive Ann Elliott to launch the sector’s first conference featuring an all-female line-up of company leaders. The event, which is open for bookings, takes place on Tuesday, 4 September at One Moorgate Place, London. Speakers will be Wahaca founder Thomasina Miers (“How to ascertain if your business idea is genius or madness”); Mowgli founder Nisha Katona (“From barrister to bunny chow: why risk it all for restaurants?”); Sophie Bathgate, of Sophie’s Steakhouse (“What I would do differently next time”); Artizian founder Alison Frith (“How to market a startup”); Cheshire Cat Pubs & Bars founder Mary Mclaughlin (“Growing an idea from startup to sustainable”); Eve Bugler, founder of BabaBoom (“How to keep the joy when it’s all on your shoulders”); Jane O’Riordan, founder of The Dynamo (“The importance of patience”); Sally Jackson, owner of The Pink Pig Farm (“The ten hardest lessons I’ve learned”); Christine Winton, of Siam Eatery (“Can you have work-life balance when you start a business?”); Vanessa Hall, co-founder of Jack & Alice (“The importance of staying true to your values when you start and expand your business”); and Laura Harper-Hinton, co-founder of Caravan (“Why people are key to your success”). The event will also see an award given to the Wireless Social Female Entrepreneur of the Year. Elliott said: “Female entrepreneurs are making an enormous contribution to the hospitality sector – but we need even more of them. The conference is intended as a showcase of some of the sector’s best female entrepreneurs and to encourage even more of them to take the plunge.” Propel managing director Paul Charity added: “If our sector is to truly serve its market, we need more companies led by women at senior levels. We hope companies send their brightest female talent to the conference to pick up inspiration and develop their entrepreneurial talent. We also believe it’s a great opportunity for male colleagues to gain insights into female entrepreneurial skills.” Tickets are £195 plus VAT for Propel Premium subscribers, £245 plus VAT for operators and £395 plus VAT for suppliers and can be booked by emailing anne.steele@propelinfo.com or calling her on 01444 817691.

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