McDonald's – The Leading Global Fast Food Service

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McDonald's is perhaps the greatest franchising story to blossom out of the 19th century. Not to forget it has blossomed in to a franchising power house in the 20^th Century. Spread over a staggering 118 countries/territories this once upon a time hamburger-joint serves more than 68 million loyal customers a day. It just can’t be Ronald the-clowns charm that they keep coming back for. It’s the relationship of joy and happiness the restaurant has created with its ever growing customers. It listens and understands its consumers. The altering of menu as per culture and country is evident to support that claim. It’s a very unique composition of sustainable business success where value is delivered to all spheres of the business/stakeholders. It is noteworthy here that the most growing region of McDonald's happens to be the Asia Pacific, Middle East and Africa region. This could be attributed to McDonald's strong brand equity globally. A McDonald's restaurant is operated by a franchisee, an affiliate, or the corporation itself. McDonald's Corporation revenues come from the rent, royalties, and fees paid by the franchisees, as well as sales in company-operated restaurants. In 2012, McDonald's Corporation had annual revenues of $27.5 billion, and profits of $5.5 billion. But 2013 was different the company revenues and profit bit change.

McDonald’s Corporation (MCD) announced results for the fourth quarter of fiscal year 2013 (4QFY13), along with a few new figures for the full FY13. In the latest quarter end of the year, the company reported net income of $1,397 million, which translates to earnings per share (EPS) of $1.4. EPS was up 1% over 4QFY12, and beat estimates of $1.39. Revenues, on the other hand, were largely in line with expectations at $7.09 billion, up 2% from 4QFY13. McDonald's reported EPS of $5.55 for the full year, which was again in line with expectations. Revenues for FY13 came in at $28.1 billion. The Mcdonald's also announced that its global comparable store sales fell 0.1% in the fourth quarter as a result of lower guest count.

US same store sales fell 1.4% as customers increasingly favor healthier food choices, while European comparable sales rose 1% over the same quarter of last year due to improving economic conditions in the region, and a greater marketing push. Comparable sales in the all-important Asia Pacific, Middle East and Africa (APMEA) region declined 2.4% due to weak performance in Japan, and a slowdown in China and Australia. The share price of Company is down 0.6% in pre-market hours after the news was reported. In a statement which was released on Thursday morning, McDonald’s president and CEO Don Thompson acknowledged that 2013 was a “challenging” year but said that the company is beginning 2014 with a renewed focus on its growth priorities. “We are uniting consumer insights with innovation and consistent execution to optimize our menu, modernize the customer experience and broaden accessibility to Brand McDonald’s,” he said. A breakdown of the fourth quarter’s results by segment reveals just why a renewed focus is necessary: comparable sales in the U.S. declined 1.4% in the quarter, a greater decline than the 0.2% analysts were expecting. Asia/Pacific, Middle East and Africa (APMEA) was yet again a weak point for the company, posting a comparable sales decline of 2.4% for the quarter and an 8% drop in operating income, results McDonald’s said reflected weakness in Japan and a relatively flat performance in China and Australia. Europe, however, saw comparable sales increase 1% for the quarter, thanks to strength in the U.K, Russia and France.