CHICAGO — McDonald’s Corp. plans to build hundreds of new restaurants around the globe this year, including its first new units in the United States in more than eight years. A strong comparable sales and brand performance has “given us the right to build new units at a faster rate than we have historically,” said Christopher J. Kempczinski, president and chief executive officer.
The fast-food company said it will open approximately 1,900 restaurants with more than 400 of the openings in the United States and international operated markets, which include Australia, Canada, France, Germany and the United Kingdom. The remaining 1,500 restaurants will be across McDonald’s international developmental licensed markets, including about 900 in China.
“I mean, 2014 was the last year that we actually grew restaurants in the US,” said Ian Frederick Borden, executive vice president and chief financial officer, during a Jan. 31 conference call to discuss full-year and fourth-quarter financial results. “So, we’ve had eight years where we have been focused largely on a remodel program. And in that same period of time, I think everybody would agree, our US business is in a significantly better shape today than it was back then.”
Mr. Kempczinski added, “when you want to be growing units is when you’ve got strong comp sales because that reflects the underlying health of the business.”
“I feel very good about the outlook,” he said. “And so that now gives to me permission to put on top of that some unit growth. But we need to be very smart about where and how we do that. And I think sometimes in the past, we were looking at just putting units and looking at an absolute number and not maybe looking at the quality of the site. And so that’s why we want to take some time this year to make sure we feel confident about the exact number, the pacing, the quality of the site so that when we do roll that out that we’ve got the ability to continue to drive both comp sales as well as unit growth.”
McDonald’s net income for the fiscal year ended Dec. 31, 2022, was $6.2 billion, equal to $8.33 per share, down 18% from net income of $7.5 billion, or $10.04 per share, the year before. Results for the recent year included $1.3 billion of charges related to the sale of the company’s Russia business and a gain of $271 million related to the sale of the company’s Dynamic Yield business. Results for the year prior included charges of $54 million related to the sale of McD Tech Labs, net gains of $339 million related to the sale of McDonald’s Japan stock and an income tax benefit of $364 million.
Revenues for the full year totaled $23.2 billion, even with the prior year and up 6% in constant currencies.
For the full year, global comparable sales increased 11%, reflecting growth across all segments. US comparable sales climbed 5.9%, while international operated markets and international developmental licensed markets segments grew 13% and 16%, respectively.
Fourth-quarter net income advanced 16% to $1.9 billion, equal to $2.59 per share, which compared with $1.6 billion, or $2.18 per share, in the prior-year period.
Revenues for the fourth quarter declined 1% to $5.9 billion from $6 billion. In constant currencies, revenues increased 5%.
Global comparable sales in the fourth quarter increased 13%, driven by 10% growth in US comparable sales, 13% growth in international operated markets and 17% growth in international developmental licensed markets.
“Focusing just on the US, I think what we saw from a performance standpoint was very balanced growth across the dayparts,” Mr. Kempczinski said. “Late night for us continues to be the opportunity just because of some changes that we’ve made around operating hours due to the staffing environment. But around kind of our core dayparts, that’s been very strong.
“We’re also seeing strong growth on our core menu, particularly on chicken, where we’ve been gaining share, quite a bit of share on chicken. We’ve gained about 1 point of share on chicken in the last year. And then if you think about beef, we’re also continuing to grow our share in beef despite having a very strong presence in that already.”
He noted lower-income consumers are visiting McDonald’s restaurants more frequently while spending less per trip. And while executives expect inflationary costs to persist in the year ahead, Mr. Kempczinski said the company will maintain a “disciplined approach to pricing” to protect its position on value with consumers.
“Our positive guest count performance in 2022 demonstrates our success so far in balancing these competing demands, and we need to remain judicious with pricing actions,” he said.Management’s growth plans for the year failed to impress investors. McDonald’s share price closed at $267.40 on Jan. 31, down 1.3% from the day before.