McDonald's Reports $25.9 Billion Revenue for Fiscal Year 2024, Operating Income Rises 1%

McDonald's Corporation reported a consolidated revenue of $25.9 billion for the fiscal year ending December 31, 2024, marking a 2% increase from the previous year. The company's operating income also saw a slight rise of 1% to $11.7 billion, although the operating margin decreased from 46% in 2023 to 45% in 2024. Net income for the year was $8.2 billion, a decrease of 3% compared to 2023, with diluted earnings per share falling by 1% to $11.39. The decline in profitability was attributed to higher interest expenses, a higher effective tax rate, and lower non-operating income, despite an increase in sales-driven franchised margins.

In terms of operational performance, global comparable sales decreased by 0.1%, with the U.S. segment experiencing a modest increase of 0.2%. The International Operated Markets segment saw a decline of 0.2%, while the International Developmental Licensed Markets segment reported a decrease of 0.3%. The company opened over 2,100 new restaurants globally, contributing to a total of 43,477 restaurants by year-end, with approximately 95% being franchised. The company also increased its quarterly cash dividend by 6% to $1.77 per share, reflecting its commitment to returning value to shareholders.

Strategically, McDonald's continued to implement its "Accelerating the Arches" growth strategy, which includes enhancing its marketing efforts, focusing on core menu items, and expanding digital and delivery services. The company is also investing in technology to improve customer experience and operational efficiency. Notably, McDonald's acquired a controlling interest in its business in Israel and increased its stake in its China operations, which are expected to enhance its market presence in these regions.

The company faced challenges from external factors, including the ongoing war in the Middle East, which negatively impacted sales in the International Developmental Licensed Markets segment. Additionally, inflationary pressures continued to affect costs, particularly in the U.S. market. Looking ahead, McDonald's anticipates a slight increase in Systemwide sales growth driven by net restaurant unit expansion and expects to open approximately 2,200 new restaurants in 2025. The company aims to maintain an operating margin in the mid-to-high 40% range and a free cash flow conversion rate in the low-to-mid 80% range.