McDonald’s 2023 Earnings Report

McDonald’s 2023 annual net profit was almost $2 billion more than the previous year despite a fourth-quarter slowdown due to conflicts in the Middle East.

McDonald’s, a fast-food giant with over 40,000 locations globally released its 2023 annual earnings report on February 22, 2024. Franchised locations are responsible for 95% of sales. Currently, the stock is trading at $282.63 per share compared to Forbes's expected price of $297 per share.

In 2023, McDonald’s net profit was $8.47 billion, a 37% jump compared to $6.18 billion the year before.

The company was able to keep operating expenses almost the same as the year prior. McDonald’s maintained its costs and increased its revenue by another $2 billion. Total revenue for 2023 was $25.45 billion while 2022 was $23.18 billion. With a $2 billion difference and almost identical total operating costs, the main factor for the company’s increased net profit was its ability to maintain operating expenses at around $13.8 billion.

However, in the fourth quarter, growth slowed more than expected. Global same-store sales grew only 3.4% in the fourth quarter of 2023 compared to an expected growth of 4.7%, according to a story from the Wall Street Journal.

Despite the slowed growth in Q4 the company still greatly increased its annual net profit.

Chris Kempczinski, McDonald’s president and chief executive officer, attributed the growth in overall global sales to the company’s Accelerating the Arches initiative. The initiative focuses on culturally relevant marketing, affordable core equities and elevated digital experiences for McDonald’s customers.

“Our global comparable sales growth of 9% for the year is a testament to the tremendous dedication of the entire McDonald’s System,” Kempczinski said.

Going forward, a decrease in profit is possible for the company as more consumers may turn to cooking at home. With increased prices at McDonald’s the products are no longer as affordable to lower-income customers. Additionally, the war in the Middle East has led to increased pressure placed on the company.

A note included in the company’s annual report discussed the possible impact on sales due to the conflicts in the Middle East.

“The Company is monitoring the evolving situation, which it expects to continue to have a negative impact on Systemwide sales and revenue as long as the war continues,” the annual 10K stated.

However, despite the conflict, Kempczinski said he remains confident in the business and its navigation of the macro challenges that 2024 brings.