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McDonald's Continues To Invest For Future Growth

Stocks in this article: MCD

OAK BROOK, Ill., Nov. 14, 2013 /PRNewswire-FirstCall/ -- During the Company's investor meeting today, McDonald's Corporation President and Chief Executive Officer Don Thompson and members of senior management reiterated the Company's commitment to its strategic plan - the Plan to Win - and its global growth priorities of optimizing the menu, modernizing the customer experience and broadening accessibility to Brand McDonald's.

"For more than ten years, the Plan to Win along with our System alignment, financial strength and distinct competitive advantages have served as the critical framework behind our growth," said Don Thompson.  "Today, the Plan to Win continues to guide the evolution and execution of our global growth priorities as we strive to become even better and bigger."

McDonald's reaffirmed its long-term average annual constant currency growth targets:

  • Systemwide sales growth of 3% to 5%
  • Operating income growth of 6% to 7%, and
  • Return on incremental invested capital in the high teens

During the meeting, the Company also highlighted the following outlook for 2014:

  • Capital expenditures of $2.9 - $3.0 billion, providing for 1,500 - 1,600 new restaurant openings and about 1,000 reimages.
  • Commodity cost forecast reflecting an increase in the Company's overall basket of goods of 1.0% - 2.0% in the U.S. and 1.5% - 2.5% in Europe.
  • G&A increase of approximately $200 million reflecting:
    • Higher employee expenses, primarily due to the impact of below-target 2013 incentive pay, as well as costs to support restaurant growth, capacity enhancements and digital initiatives, and
    • Expenses associated with our Worldwide Owner/Operator convention and sponsorship of the Winter Olympic Games in Sochi.

"Given the resilience and stability of our business model, we believe that our average annual constant currency growth targets remain realistic and achievable and keep us focused on making the best decisions for the long term," said Thompson.  "These targets continue to align our System behind growing sales and profitability to generate strong returns.  While the fundamentals of our business have not changed, when we look at the market dynamics for 2014 we do not see material changes versus 2013.  As such, we are focused on those things within our control - evolving to meet changing consumer preferences, investing to build demand, and maintaining our focus on execution and operations excellence."

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