McDonald's Corporation

Ladies and gentlemen, please stand by. Hello and welcome to the McDonald's Second Quarter 2022 Investor Conference Call. At the request of McDonald's Corporation, this conference is being recorded. Following today's presentation, there will be a question and answer session for investors. At that time, investors only may ask a question by pressing star 1 on their touchtone phone. I would now like to turn the conference over to Mr. Mike Cplak, Investor Relations Officer for McDonald's Corporation.

Good morning, everyone, and thank you for joining us. With me on the call today are President and Chief Executive Officer Chris Kamchinski and Chief Financial Officer Kevin Ozan. As a reminder, the forward-looking statements in our earnings release and 8K filing also apply to our comments on the call today. Both of those documents are available on our website, as are reconciliations of any non-GAAP financial measures mentioned on today's call, along with their corresponding GAAP measures. Following prepared remarks this morning, we will take your questions. Please limit yourself to one question and reenter the queue for any additional questions. Today's conference call is being webcast and is also being recorded for replay via our website. And now I'll turn it over to Chris.

Thanks, Mike, and good morning, everyone. I'm proud to report that our Q2 performance was yet another demonstration of our broad-based business momentum, with global comp sales up nearly 10%. and most of our major markets continuing to grow market share. One thing is clear, the world continues to move in fast and often unforeseen ways. As it does, the McDonald's brand endures. But before we get into details of the past quarter, I want to offer up a few words about Kevin Ozan, who is joining today's call for the final time as McDonald's Chief Financial Officer. According to Kevin, this is his 30th earnings call as CFO, but who's counting? To say that Kevin has had a profound impact on McDonald's is an understatement, and I should note that this impact isn't coming to an end just yet. But as he transitions from his duties as CFO, it's a perfect time to reflect on what he has done in this seat. When Kevin first took the reins as CFO in Q1 2015, comparable sales and guest counts were declining globally and across each geographic segment, and there were real questions about the growth outlook for the company. Rising customer and investor expectations demanded a clear vision and voice, which Kevin ably provided. Kevin has been a constant in shepherding McDonald's through unprecedented change again and again. From leading the company's financial turnaround in 2015 and helping create our last two strategic growth plans to navigating through a global pandemic and exiting a major market, Kevin has seen it all. During his time as CFO, the company increased system-wide sales by over 25% to more than $100 billion, increased the number of restaurants worldwide by more than 10% to nearly 40,000 restaurants, and returned over $50 billion to shareholders through dividends and share repurchases. As just one barometer of Kevin's impact, McDonald's stock has appreciated 150% during his tenure. Anyone who's worked with Kevin knows his leadership is as much about what he does as how he does it. His insightful strategic approach to the business is matched by his ability to make human connections at all levels and with all stakeholders across our system. It's safe to say that Kevin is one of the most beloved senior leaders in our organization. But like I said, Kevin's not going anywhere just yet. He's been promoted to a new elevated role as our Senior Executive Vice President of Strategic Initiatives where he'll work closely with me until his retirement next year. I'll look to his counsel as we execute against our Accelerating the Arches strategy and identify areas where we can continue to evolve this strategy to meet the needs of customers long into the future. I expect we'll be sharing more down the road with all of you. Kevin, this isn't goodbye, not by a long shot, but on behalf of the entire McDonald's system, it's an opportune time to say thank you. Now on to the business operating environment. As we entered the year, we knew we were facing rising inflation, a surge in COVID-19 cases, and the return of government restrictions in many markets, exacerbating labor shortages and supply chain challenges. Over the last six months, the macro uncertainty has only increased. We now face war in Europe. Inflation is running at its highest levels in 40 years. Interest rates are rising to levels we haven't seen in years. All of this is contributing to weak consumer sentiment around the world and the possibility of a global recession. We're mindful of these risks, and we're planning for a wider range of scenarios. And while our McDonald's business continues to perform well, this is a very challenging environment for our McFamily, from restaurant teams to franchisees to suppliers. But we're united in our purpose to feed and foster the communities in which we operate, to provide an affordable destination for a delicious meal. Now more than ever, that is what our customers are seeking, which is why we feel so well positioned and confident in our continued success. Our global system is aligned behind a comprehensive strategy that is centered on the customer. This is strengthening our brand, which is driving broad-based market share gains. I mentioned during our last quarter that we would provide an update on the state of our business in Russia. became increasingly clear the Russian war against Ukraine meant that McDonald's wouldn't be able to continue to operate in Russia in a way that would be accretive to our business objectives or aligned with our values. That's why in May, we announced that we would exit the market and sell our restaurants to a Russian buyer to be operated under a different identity. While the golden arches no longer shine in Russia, we are continuing to support our people in Ukraine and remain ever hopeful for a resolution to this conflict. Now, for more on our Q2 numbers, let me turn it over to Kevin so he can give his 30th and final quarterly earnings readout. Kevin?