In the International Lead markets, as part of refranchising, $MCD
is selling lower volume restaurants with potentially lower margins. In the near
term, this slightly impacts the franchise margin percent. The margins were also
pressured by lease costs. $MCD said positive comparable sales will help drive
By mid-2017, $MCD expects to refranchise over 3,500 restaurants
towards its goal of refranchising 4,000 by the end of 2018. The China/Hong Kong
transaction, which is expected to close mid-2017, is the most significant
transaction of the company’s refranchising efforts resulting in the sale of
more than 1,750 company-owned stores.
In the Foundational markets, $MCD saw positive comparable sales
of 11.1% for 4Q16 and 10% for 2016 with strong performance in Japan and certain
markets in Latin America, throughout 2016, as well as solid results across the
segment’s remaining geographic regions.
During 4Q16, $MCD delivered strong performance in the UK driven by
new food news, a steady focus on core classics and value. Australia continued
its positive momentum despite intensified competition in the marketplace. The
company saw strong performance in Canada and sees significant opportunity for
improvement in Germany and France.
$MCD's global comparable sales were up 3.8% for 2016. Operating
income increased 7% for 4Q16 and 11% for 2016 in constant currencies. The
company’s EPS increased 12% in 4Q16 and 16% in 2016 in constant currencies. Restaurant
cash flows grew worldwide and $MCD saw all-time highs in many major markets,
including the US.