McDonald's Corporation

Hello and welcome to McDonald's first quarter 2023 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. Mr. Cplak, you may begin.

Good morning, everyone, and thank you for joining us. With me on the call today are President and Chief Executive Officer Chris Kamczynski and Chief Financial Officer Ian Borden. As a reminder, the forward-looking statements in our earnings release and 8 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 then re-enter 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. You know, ordinarily in a global business like ours, for a quarterly earnings call, you're prepping to memorize all the different sets of numbers. What's notable about this earnings call is McDonald's consistency. Consistency in the strength of our numbers, consistency in the powerful drivers of our business, and consistency in the excitement that exists across the system about the opportunities that lie in front of us. Let's start with the numbers. At the top line, you only need to know one number, 12.6%. U.S. comparable sales, 12.6%. IOM comparable sales, 12.6%. IDL comparable sales, 12.6%. And global comparable sales, you guessed it, 12.6%. These results reflect strong consumer demand for McDonald's that we are seeing around the world despite a challenging operating environment and historically low consumer sentiment in many markets. It is clear that our accelerating the arches strategy is working, and we are operating from a position of strength. Each of our MCD growth pillars is contributing to our strong, balanced performance. And importantly, while we've talked in the past about the noise associated with the guest count metric, it is encouraging to see guest counts grow in every segment. In just the last few months, I have visited with our McDonald's teams in France, Japan, the Philippines, UAE, and Israel. It has been inspiring to see the dedication of all three legs of the stool. Our teams are proud of what they've accomplished and are performing at a high level. For me, it's been energizing to hear their ideas for how we can do even more to take care of our customers. That's what I love most about the McDonald's system. our restless ambition. While we feel good about our current strategy, our success is driving us to do even more to lay a foundation for the future. Back in January, we announced the evolution of Accelerating the Arches. We're continuing to double down on our existing growth pillars while advancing two new initiatives. The first is accelerating restaurant development. Our strong performance has earned us the right to open new restaurants at a faster rate than we have historically. We're focused this year on determining the best path forward to meet customer demand and look forward to sharing more at our Investor Day later this year. The second newer element of our strategy is fundamentally rethinking how we, as a company, can work better together to become faster, more innovative, and more efficient. We're calling this accelerating the organization. In March, we convened our annual leadership summit with top leaders from across the globe. As part of this meeting, we discussed three changes to our ways of working that will enable us to leverage our scale more effectively to meet the needs of our system and customers and unlock significant growth potential. The first is implementing horizontal ways of working. For years, our organization, like many others, was too siloed, whether that be geographically siloed or functionally siloed. And yet, our biggest challenges and opportunities are rarely limited to just one market. They can't be solved by only one function. They require collaborating across the organization bring the full breadth of McDonald's skills and experiences to devise the best system solution that can be scaled globally. In other words, they need to be solved horizontally. With accelerating the organization, we're now structured to work much more seamlessly in a horizontal fashion to solve these problems once and then scale solutions across markets. For example, Is our app offering a seamless and personalized user experience? Are we continuing to increase our speed of service? Those are opportunities across every single market and require the expertise of multiple functions. To support our ambition to scale innovations with greater agility and collaborate more effectively, our second key shift is adopting one McDonald's way. to standardize the common processes we use to drive consistency and enable speed. We're an innovative, entrepreneurial organization. But once a part of our system somewhere has solved a problem or developed a novel idea, we need to stop the work elsewhere. We don't need every market to invent its own light bulb, so to speak. This approach allows us to use our size and scale for the greatest impact. For example, we're already seeing success in how our marketing teams are implementing common processes to quickly scale great creative, such as the Raise Your Archers campaign, which Ian will talk more about. Finally, we're making strategic investments in digitizing our organization and implementing new tools and platforms that make it easier for employees to access information to gain insights and drive performance. Ultimately, this will allow our market teams to spend more time in the restaurants, understanding the needs of customers, franchisees, and crew. Key to operationalizing all three areas of our internal transformation is our enterprise global business services organization, also known as GBS. In 2023, GBS will focus on building a long-term strategy that ultimately provides a better experience for all three legs of the stool. GBS will be a key enabler to digitizing our organization, driving efficiency, and providing value back to the business for our people, our franchisees, and our suppliers. Harnessing the power of our scale, our ability to strategically invest, and the versatility of our system is the secret sauce that will empower us to provide even more memorable customer experiences for generations to come. To expand further on how we are optimizing the business and our growth strategy, I will now turn it over to Ian. Thanks, Chris.