McDonald’s Corporation (MCD)

“I feel very confident that we'll be able to get this thing done.”

“We expect comp sales growth in both segments to accelerate sequentially in Q3 from the 1.5% and 1.9% comps in Q2, respectively, and we also expect comp sales in both segments to accelerate on a two-year stack basis.”

“We remain on track for G&A to be about 2.2% of system-wide sales for the full year.”

“What is important, and something we will discuss more at Investor Day, is that beverages are part of the baseline growth platforms that can deliver multiple years of growth, which is why we plan to continue extending the platform to other markets.”

“The segment's comparable sales growth was tempered by results in China, where we expect the macro environment and the consumer backdrop to remain challenging in the near term.”

“In short, we're acting with urgency to improve our baseline guest traffic and put the U.S. business in a stronger position as we exit 2026.”

“Our main focus is ensuring our execution reaches the level we expect and that our baseline momentum is in a stronger position as we exit 2026 in the U.S. business.”

“By Investor Day, I should have a better answer on where we are aligned with the system on value and how quickly those changes will flow through to what you see in market.”

“So nothing in Q3, but we are looking at ways to enhance the program in Q4, and we should be fully back to where we need to be in 2027.”

“We remain on track to open about 2,600 gross restaurants by the end of this year.”

“We now expect to reach 50,000 restaurants globally in 2028.”

“As part of this ongoing work across both the U.S. and international markets, we expect incremental company-owned restaurant divestitures, some of which occurred in the second quarter to continue in 2026 and beyond.”

“In 2027, we expect that we'll begin to see the benefits from those investments as we seek to lower G&A percentage spend.”

“That's down from our previously estimated range of a $0.20 to $0.30 tailwind.”

“We currently estimate a tailwind of about $0.15 from the impact of foreign currency translation on full year 2026 adjusted EPS based on current exchange rates.”

“Certainly, our expectation is, as we've been doing, that we're going to continue to gain share. And so if you look at May and June, our expectation is that we should in our major markets be gaining share.”

“Financial support to franchisees under the EVM relaunch program is expected to be below our initial estimate of approximately $35 million, as the program continued to see positive momentum.”

“I think we feel pretty confident in our ability to navigate inflation through '26, partly because, obviously, we've got a fair bit of hedging in place, both on food and paper and on energy.”

“I think overall, we still feel confident in our ability to kind of get to about 50,000 restaurants by the end of 2027.”

“I think clearly, we're going to expect to continue to benefit from the McValue program. That's locked in through the balance of the year.”

“In regards to the remainder of the year, we are reaffirming our full year 2026 financial targets as we outlined in February.”

“I don't think we're expecting a kind of a shift in the mix. I mean, as you know, IDL already makes up the majority of our openings just because of the size of the opportunity in a lot of those developing markets.”

“And so we expect the pressures there are going to continue.”

“On commodity costs, just to be clear, because we've reiterated our guidance and part of the assumptions that went into the guidance that we issued at the beginning of the year was obviously commodity inflation from a food and paper perspective, which in the U.S., we expect to be in the low to mid-single-digit range and in IOM mid-single digits.”

“Certainly, beverages is something that we're expecting is going to be a tailwind for us for the business for the balance of the year and hopefully longer than that.”

“Based on current exchange rates, we expect foreign currency to be a full year tailwind to 2026 EPS, totaling in the range of $0.20 to $0.30.”

“While we expect the macroeconomic pressures to persist, we continue to execute against our strategy to capture the long-term growth potential of the market. We remain on track to open approximately 1,000 new restaurants in China this year.”

“And then IDL, again, expect a sequential decrease from the 4.5% that we had in Q4.”

“We grew our chicken category share across our top 10 markets in 2025 and believe we're well on our way to increasing our share by at least 1 percentage point by the end of 2026 versus where we were in December 2023.”

“And we're on track to reach our target of 250 million 90-day active users by the end of 2027.”

“which keeps us on track to achieve 50,000 restaurants by the end of 2027.”

“I think we expect probably that the first half will be likely a little stronger than the second half, and that's just largely a reflection of kind of the benefit of the favorable year-over-year comparisons that we're up against.”

“You can expect to see new offerings in the U.S. as well as select international markets in 2026.”

“We've continued rolling out Best Burger, which is now in more than 85 markets and on track to deliver on our commitment to be in nearly all markets by the end of 2026.”

“We're excited to share what's next with our system at our worldwide convention in Las Vegas in June, and we expect to share more details with all of you during an investor update sometime this fall.”

“Lastly, we're targeting our net income to free cash flow conversion rate in 2026 to be in the low to mid-80% range, which is in line with the 84% in 2025.”

“We expect our capital expenditure spend to be between $3.7 billion and $3.9 billion this year, with the majority invested in new unit openings across our U.S. and IOM segments.”

“Overall, we anticipate about 4.5% unit growth from the approximately 2,100 net restaurant additions in 2026.”

“We expect to open more than 1,800 restaurants in our IDL segment, including about 1,000 in China.”

“In 2026, we're targeting approximately 2,600 gross restaurant openings with about 750 of these in our U.S. and IOM segments.”

“We expect foreign currency to be a full year tailwind to 2026 EPS, totaling in the range of $0.20 to $0.30 based on current exchange rates.”

“and expect our full year effective tax rate to be between 21% and 23% with some volatility quarter-to-quarter that may cause the quarterly rate to be outside the annual range.”

“Below the operating line, we expect interest expense to increase between 4% to 6% from the prior year, primarily due to higher average interest rates”

“We're targeting G&A as a percentage of system-wide sales for the full year to be about 2.2%, reflecting our ongoing investments in our strategic growth drivers like technology and digital and Global Business Services or GBS.”

“We expect our operating margin to be in the mid- to high 40% range and to expand from our 46.9% adjusted operating margin in 2025.”

“We expect that net restaurant expansion in 2026, along with restaurants we opened in 2025, will contribute approximately 2.5% to system-wide sales growth.”

“Our pace of new store openings will accelerate further as we target approximately 2,600 gross restaurant openings in 2026, which keeps us on track to achieve 50,000 restaurants by the end of 2027.”

“I think our basket of goods means we still have confidence in that kind of low to mid-single-digit range.”

“We're on track to deliver our financial targets for the year, which include the expected impacts from tariffs currently in place, and remain focused on executing our Accelerating the Arches strategy to create long-term value for our stakeholders.”

“We've said this year, we expect kind of our basket of food and paper inflation to be in the low to mid-single-digit range for the year.”

“And so on a 2-year stack basis, we expect Q4 comp sales growth for both segments will accelerate meaningfully and sequentially.”

“I think we believe that our Q4 comp sales in each of our international segments may decelerate sequentially, but that's largely a reflection of the lapping of more difficult prior year comparisons.”

“On the international segments, I would say, I think we expect operating conditions across our top markets in Q4 will be pretty similar to what we've seen in the last couple of quarters.”

“We also expect in the U.S. that we'll see a notable step-up in comp sales growth for those reasons in Q4 and expect -- I think our comp sales growth on a 2-year stack base will accelerate modestly from the 2.7% that we saw in Q3 on a 2-year basis.”

“I think in the U.S., we actually expect our comp sales growth will accelerate in Q4 versus the 2.4% that we delivered in Q3.”

“What we expect is going to happen is that by the end of Q1, our system is going to be a position here where it's actually going to be a better decision to continue with the EVMs than it is to go back to where we were and create the problem all over again.”

“We expect that to be significantly less in Q1 than what we're providing in Q4 this year.”

“We expect that support in Q4 to be about $75 million.”

“In the short-term, that continues put pressure on margins.”

“We're projecting our full year effective tax rate to be between 21% and 22%, which is tightening the range from our previous estimate.”

“We're still in the early stages of the program and expect that the associated comp sales lift and traffic improvements will continue to build as awareness of the program increases over the coming quarters.”

“We have no change in our view that we're going to be able to drive margin accretion and margin growth over time as we drive that top line growth.”

“We're on track to deliver our current year targets and our 50,000 restaurants globally by the end of 2027.”

“Certainly as good as our crystal ball is, we would say that certainly seems to be what's on up over the next at least several quarters.”

“And then I think if you look at a little bit more texture, we certainly believe Q4 will be stronger in the U.S. business than Q3 simply because we've got that lapping of the food safety event that we worked through in Q4 last year.”

“Ready on arrival is deploying in restaurants across 5 of the top 6 markets and we're on track to launch in the last of the top 6 later this year.”

“Despite these headwinds, we remain confident in the long-term potential of the China market and remain on track to deliver on our new restaurant opening target there this year.”

“We're on track to deliver our financial targets for the year.”

“I think as you've heard us talk a lot about -- we've got a lot of activity in regards to areas like transformation and some of the work we're driving in tech and digital. And just that, I think, is kind of the spending pattern that we anticipate this year, which is pretty typical, but probably a little bit more kind of back half weighted this year than maybe what we've seen in prior years.”

“I mean I think the kind of natural cycle of G&A spend is back-half weighted and frankly, generally fourth quarter weighted.”

“And I think if you think of what we talked about at the beginning of the year, we said upfront at the beginning of the year that we thought the back half of the year would be stronger than the front half of the year. I think that remains our belief.”

“In total, we continue to expect slightly over 4% unit growth from the nearly 1,800 net restaurant additions in 2025.”

“We expect to open more than 1,600 restaurants in our IDL markets, including about 1,000 in China.”

“Finally, we remain on pace to open approximately 2,200 restaurants globally this year and continue to target about 1/4 of these openings to be in our U.S. and IOM segments.”

“We currently estimate the tailwind from the impact of foreign currency translation on adjusted earnings per share to be about $0.15 based on current exchange rates.”

“We continue to target a full year effective tax rate of 20% to 22% with some quarterly volatility.”

“That's at the low end of our previous estimate of 4% to 6%, largely due to lower-than-expected increases in average interest rates.”

“Below the operating line, we're projecting our full year interest expense to increase by about 4% compared to 2024.”

“We're still targeting G&A as a percentage of system-wide sales to be about 2.2% for the full year.”

“However, we're adjusting our full year margin target for company-operated restaurants to be around the 14.8% that we delivered in 2024, which we had previously targeted to increase slightly.”

“Nonetheless, we continue to target a full year adjusted operating margin in the mid- to high 40% range and above the 46.3% adjusted operating margin in 2024.”

“And we remain on track to grow our global chicken share by 100 basis points by the end of 2026, in line with the target we shared at our investor update in late 2023.”

“I think you're going to see the restaurant and company platform benefits emerge over the next couple of years.”

“We'll get to basically about 1,000 gross openings a year in our owned markets by 2027, that commitment that we made at the end of '23 to get to 50,000 restaurants.”

“In 2023, we set a goal to reach 250 million 90-day active loyalty users by the end of 2027.”

“Today, it's currently in more than 80 markets, and we expect it will be in nearly all markets by the end of 2026.”

“We feel pretty good about being able to win against all those consumer groups as we work through the rest of the year.”

“With respect to the remainder of the year, while we remain cautious about consumer sentiment, we are reaffirming our full year 2025 financial targets that we outlined in February, which include the impact from tariffs that are currently in place.”

“I think we continue to believe if we use McOpCo margins as the example in the U.S. for this year, for the total year on a percentage basis, we expect to be slightly up on a percentage basis versus where we were in 2024.”

“But I think until we get to quarter three this year, you're going to continue to see a bit of that mix play in check and margin until we get more comparable.”

“So, assuming inflation keeps coming down, I would expect the contribution from price to kind of continue to moderate in line with that.”

“So, it's a more inflationary environment in Europe, which means we just have to be really judicious about how and where we take pricing in that environment.”

“While we may adjust our current McValue offerings over time, for the remainder of 2025, we'll continue to include everyday value meal deals starting at $5, given how the current $5 Meal Deal in particular has resonated with customers.”

“The introduction of exciting new menu items, such as the nationwide launch of McCrispy Chicken Strips in the U.S. should contribute to this growth.”

“We continue to expect our guest count and market share performance will improve from the first quarter low point, driven by our emphasis on strong value and affordability execution that we have been addressing.”

“But I think if we look at our plans in total, across the majority of our markets, we certainly feel good that we can drive improvement to cash flow, and that'll be based on obviously driving that strong top-line volume and then obviously taking Makopka margin from a percentage basis up slightly versus where it was in 2024.”

“we feel confident about getting momentum back, and it's obviously volume ultimately and then that pairing for that kind of one-two punch that gives us confidence in our ability to grow margin in 2025 and then certainly beyond as we continue to get that strong top-line growth.”

“I think we remain really confident in our ability to drive margin improvement over time as we get that stronger top-line growth.”

“I don't expect to see in 2025 that you're going to be getting any material benefits out of this, which is very consistent with how we've built the whole business case on this.”

“we certainly didn't expect to see us getting any of the benefits of that in 2024 or 2025 because we're very much in an investment phase.”

“GCs are running ahead of check, and that's very much consistent with our experience as you're putting in new value programs, you will see check run ahead of GCs.”

“we expect net restaurant expansion in 2025, along with restaurants we opened in 2024, will contribute slightly over 2% to system-wide sales growth as we continue to accelerate our new unit development.”

“We expect 2025 G&A as a percentage of system-wide sales for the full year to be about 2.2%.”

“we certainly believe when we get past these kind of more significant investment years, we'll see substantive kind of efficiencies being driven.”

“we're kind of in our peak investment years 2025, 2026, and into frankly part of 2027.”

“Over the longer term, we continue to target free cash flow conversion in the 90%, reflecting the resiliency of our business model.”

“This increase in CapEx versus the prior year is in line with our expectation of about $300 million to $500 million increases each year through 2027, as we outlined at our December 2023 Investor Day.”

“we're on track to reach 50,000 restaurants by the end of 2027.”

“we're on track toward our long-term targets of 250 million 90-day active users and $45 billion in annual system-wide sales by the end of 2027.”

“Deployment of Best Burger continues. It's currently available in over 80 countries, and we're on track to implement it in nearly all markets by the end of 2026.”

“we see the potential to add another point of chicken market share by the end of 2026.”

“And I think as we look into '25, we certainly feel confident in that.”

“Well, look, I think on margins, I would just go back to -- if you think about the momentum that we have been able to drive in the US business through the third quarter and at least to start in October, it's that kind of momentum that's going to be able to drive margin growth, both in percentage and dollars.”

“Right now, we're seeing good returns on our new units. As we look at the US, we're on pace to hit our development goals in the US.”

“So, we feel really confident about our ability to grow margin percent over the mid- and longer-term as we drive that stronger traffic and volume growth in the business.”

“With respect to the remainder of the year, we are reaffirming the other aspects of our financial outlook for 2024 under the assumption that the public health situation that Chris spoke to upfront will not have a material impact to our business.”

“we're accelerating plans and will work with franchisees and partners to deploy the Big Arch faster into more international markets in 2025.”

“but we still have commodity pressure even though this year we expect '24 increase in commodities to be in that low single-digit range.”

“We're doing that obviously because we've got some relief on kind of the incentive-based part of G&A, but we're also being very disciplined in our current year spending in areas like travel, meetings, professional services, all the things that you would expect us to be doing in the current context while continuing to invest obviously in our enterprise transformation efforts”

“I think you'll see a few more things coming in over the next quarter or so around that so that we are in a position to be best placed in '25 irregardless of the context around us.”

“We're going to have food innovation as well in Q4.”

“And we now expect the company's interest expense to increase by approximately 11% for the full year.”

“As we have stated before, as long as the war in the Middle East continues, we expect our business to continue to be impacted.”

“we are working with the rest of our top six markets to deploy this technology by the end of 2025.”

“we expect all restaurants in the US to resume the sale of Quarter Pounders in the coming week.”

“with our aim to reach 250 million active users by the end of 2027, well within our reach.”

“I think we still feel we can get pricing, but I think that is going to be at more conservative levels until we get the right momentum back in the business in each and every one of our markets.”

“I think we're going to obviously continue to be thoughtful about incremental pricing action because I think there's a lot of resistance.”

“We absolutely are committed to getting this business back to growth foundation of that is the value platforms that we've talked about, but we need to do more on menu innovation.”

“I think in time, certainly, as you know, digital is going to continue to grow for us. We're going to get more and more customers on our digital platform.”

“I think overall, if you think about the year, I think we certainly expect, if I use company-operated margins as a proxy for those to be down a little bit from where we ended in 2023.”

“And so from our vantage point, the 1,000 restaurants per year base that we've been on, we're still working toward that number in 2024.”

“We remain on track to have best burger deployed in nearly all markets by the end of 2026.”

“We're making progress towards our ambition of 50,000 restaurants by the end of 2027.”

“If those were to ever dip below what we would consider to be an acceptable return threshold. We would certainly relook at our opening pace in China.”

“Look, I think I remain really confident in our ability to drive leverage in op margin over time as we're able to kind of continue to drive strong top line growth.”

“As I've referenced previously, we have 10 -- we plan on opening 10 restaurants.”

“I think what's important to note on pricing is, I think, our business, including our owner/operators, understand that the consumer is price-weary. And I think we certainly are going to be prudent and thoughtful about any further price increases that we're looking at for the rest of 2024 on that backdrop and keep working on the opportunity that we've talked about a fair bit already on the affordability and getting that in place to kind of address the consumer need.”

“Maybe just to build, Eric, to what Chris said, I mean, the food and paper low single digits.”

“And then on food and paper inflation, I think that's gone down to much more historical levels. So we're back at more historical levels on what we see from a food and paper inflation going forward.”

“And frankly, many of our large international markets and the U.S. -- and I think we expect in the U.S. that we're going to start the quarter roughly flat from a comp sales perspective from what we can see so far.”

“I think as a result of that, we believe we're going to likely probably be below that historical range that we had indicated.”

“As we've said before, as customers continue to be more intentional with the dollars that they spend in a pressured economic landscape, we expect moderated top line growth this year.”

“This includes new restaurant development as we look to accelerate the pace of openings and grow our footprint to 50,000 restaurants by the end of 2027.”

“We'll continue to showcase that small changes can add up to deliver big improvements to both taste and quality by scaling Best Burger to nearly all restaurants by the end of 2026.”

“I think obviously, as Chris talked about 2024, we've got some headwinds to work through, but feel really confident about our ability to continue to grow margins over time.”

“I think internationally, on the commodity side, again, I think we expect commodity inflation to be in that low single-digit range. Wage inflation probably in the low to mid-single-digit range.”

“Obviously, as we head into 2024, knowing inflation has come down a fair bit from its peak. I think, as I said earlier, I think our pricing we certainly expect will come down roughly in line with that as we work through the year.”

“we certainly think that we're going to continue to see good comp performance in that market as consumer wealth and GDP continue to grow mid-single digits.”

“We were happy with how our business performed in China. We're seeing strong growth there. We also built 1,000 restaurants in China. So we're very much on track from our development aspirations and we would expect to do something similar in 2024 from that standpoint.”

“So, we certainly had great performance over whether you look at it on a two-year horizon, a four-year horizon, 30 plus percent on a four-year horizon, call it 14% or so on a two-year horizon. So, feel great about that, but I think we are moving into 2024 that’s going to look more like what you would have considered a typical year prior to COVID and all the things that have gone on.”

“our outlook is, so long as this conflict, this war is going on, we're not making any plans, we're not expecting to see any significant improvement in this.”

“we expect our effective tax rate for the year to be between 20% and 22%.”

“We expect 2024 G&A as a percentage of system wide sales to be about 2.2%, which reflects elevated investments in technology, digital and global business services or GBS.”

“We expect our net restaurant expansion in 2024 along with restaurants we opened in 2023 will contribute nearly 2% to system wide sales growth as we begin to accelerate our new unit development and make progress against our target of 50,000 restaurants by 2027.”

“And in IDL, we do not expect to see meaningful improvement until there is a resolution in the Middle East.”

“For example, Ready on Arrival will expand across our top six markets by the end of 2025.”

“As we look to 2024 with elevated absolute prices and muted consumer confidence, we believe that consumers will continue to be more discriminating with their dollars, but we expect our focus on our MCD’s will continue to drive growth across our business.”

“we're looking forward to getting that market to 10,000 restaurants by end of 2028, which is, I think, a really important milestone as we look forward.”

“We know our ambition to reach 50,000 restaurants by the end of 2027 is a compelling opportunity and we've done our homework.”

“We aim to reach 250 million active users and $45 billion in annual loyalty system-wide sales by the end of 2027.”

“we see the potential to add another point of chicken share by 2026, in part through an expansion of our McCrispy platform into wraps and tenders.”

“There will certainly be a hit in the short-term, to franchisee cash flow in California, up to know exactly what that hit will be because of some of the mitigation efforts. But there will be a hit.”

“There is going to be a wage impact for our California franchisees.”

“So I think on the subsidies, I guess the headline would be we expect to spend in line with what we've said consistently for the year, $100 million to $150 million.”

“On the property gain, which is in our IOM segment, we expect that to be about $60 million.”

“Look, I think what I would say on company-operated restaurant margins, we've been pretty consistent in -- if you look at the full year 2023, we expect company-operated margin percent both in the U.S. and IOM to be in line roughly with where we landed in quarter 4, 2022.”

“And of course, we expect pricing to come down kind of in line with how inflation is coming down.”

“I mean I think we have spoken, and you heard it in our opening remarks, around the expectation that we're going to continue to see moderation in that top line as inflation levels continue to come down and, obviously, pricing comes down in line with that.”

“Foreign currency translation positively impacted third quarter results by about $0.08 per share with a slight tailwind expected - for the full year.”

“We're still anticipating that these efforts will have an impact of $100 million to $150 million on our full year results.”

“So again, I think we've talked about moderation. I think part of that will be pricing if inflation continues to kind of come down as we look forward.”

“I think as we look forward, again, I would just reiterate that we certainly believe as we're continuing to being able to drive that top line growth that we can continue to gain leverage in the op margin line.”

“So I think our guidance remains intact as we stated at the beginning of the year, which is we expect our G&A to be in that 2.2% to 2.3% of sales range. I would say I think I certainly expect that we'll be closer to the higher end versus the lower end of that range, but that's a bit of texture on G&A.”

“So I don't think there's been a difference versus our expectations, which is why we've reiterated that we continue to expect that we will spend between the $100 million to $150 million for the year this year.”

“We said this and I think we are consistent with that in the sense that we thought our McOpCo margin in the US business would be kind of roughly in line in terms of '23 with where we were at quarter four 2022.”

“And so I think that's kind of the third broad kind of trend that we think about when we talk about moderation. So if I spoke specifically to the US, I think we're obviously looking at kind of a one year comparable but also kind of comparing back to 2019, I think that moderation is probably more pronounced in the back half of the second half than the front half.”

“We're still anticipating that these efforts will have an impact of $100 million to $150 million for the year.”

“In line with industry trends and as inflation begins to normalize later in the year, we expect top line growth to moderate.”

“when you have a strong top line and you're working your way through inflation, you can be pretty confident, you can be very confident that you're going to get back to the cash flow growth that our system expects.”

“And I think our outlook for the full-year is it's probably going to be more like mid- to high single-digit inflation in the full-year but nonetheless, improving.”

“It certainly is going to improve. Our expectation is it's going to improve through the balance of this year, but it's still going to remain elevated versus what we've historically been accustomed to.”

“So I think as we look at it, delivery is going to remain an important part of the business, but it's certainly not going to be the degree of growth driver that it has been historically, which goes back to why having a very balanced playbook, where you're getting growth from multiple levers is so important.”

“Certainly believe inflation is front half versus back half-loaded and certainly believe as we get into the back half of the year, we'll start to see inflation moderate down but still really elevated in Europe.”

“And then I think if you move to Europe, from a food and paper commodity standpoint in 2022, we were in the mid-teen levels in Europe, and we expect to be in the mid-teens again in 2023.”

“This year, we think it will be mid- to high-single-digit.”

“one of the things that gives our system confidence is the top line performance because there's an understanding that what we're dealing with right now from an inflation standpoint that, that is going to improve. Certainly, our expectation is it's going to improve as the year unfolds.”

“Based on current exchange rates, we expect foreign exchange to reduce both the second quarter and full-year earnings per share by about $0.03 to $0.05.”

“As we've said before, we expect to gain leverage on operating margin over time.”

“We still anticipate these efforts will have an impact of between $100 million to $150 million for the year.”

“So I think certainly, you can kind of see a path forward where operating margin could come up a little bit from where our guidance is today if we continue to see that strong top line result over the course of the rest of the year, but there are several ifs there.”

“feel really good as we get out of 2023 that the momentum that we're going to continue to drive will keep us in a really strong position to start gaining leverage again.”

“So I think that gives you an indication of the level of the inflationary pressure... I would say, on an IOM basis for 2023, we probably expect food and paper inflation to be kind of in that mid-teens, not substantially lower than what we saw in 2022.”

“I think in 2023, we think our food and paper inflation is going to be kind of mid to high single digits.”

“I think in regards to G&A and ATO, ... certainly believe that, that strong top line momentum will mean that we're beginning to drive greater leverage and operating margin and anything that's kind of dependent on sales as we go forward like G&A. And so I think we certainly expect to see that beyond 2023.”

“We expect this will contribute along with restaurants opened in 2022, nearly 1.5% to system-wide sales growth.”

“Overall, we anticipate almost 4% unit growth from about 1,500 net restaurant additions in 2023.”

“Globally, we plan to open about 1,900 restaurants with more than 400 of these openings in our U.S. and IOM segments, where we continue to see strong returns.”

“Transitioning to capital expenditures, we plan to spend between $2.2 billion and $2.4 billion this year, about half of which will be dedicated to new unit openings.”

“We anticipate currency translation will negatively impact earnings per share of between $0.07 and $0.09 in the first quarter.”

“And we expect our effective tax rate for the year to be between 20% and 22%.”

“We're projecting interest expense this year to increase between 10% and 12% compared to 2022 primarily due to higher average rates on our debt balances.”

“We estimate that these efforts will have an impact of between $100 million to $150 million in 2023.”

“With significant inflationary headwinds across commodities, labor and utilities, our company-operated margin percent will be hampered in the near term, and we expect full year 2023 company-operated margin percent will be slightly lower than our quarter four results.”

“We also expect inflationary costs to continue to pressure our margins, which Ian will discuss in greater detail.”

“So I think that for us, as we look out forward, it gives us confidence that, yes, we're going to continue to have inflation into 2023, both food and paper as well as labor, but we like our position relative to competitors in terms of where we stand.”

“But I think the net of that formula is that we continue to believe we should gain leverage in G&A as we go forward.”

“I think we continue to believe that in terms of the running the business part of our G&A spend, we should be able to drive efficiency and gain leverage as we continue to go through our top-line as we go forward.”

“The 800 openings, I think you can expect that'll be kind of consistent as we go forward.”

“For the full year, we now expect G&A to be between 2. 3% and 2.4% of system-wide sales.”

“Chicken is a strong growth driver of comp sales in the quarter across our major markets and will remain a focus for us as we continue to grow our global market share in this important category.”

“and we expect October comp sales in the U.S. to be in the low double digits.”

“That's our planning expectation is that while there is going to be some shifting within the cohort or you describe it, net-net, our value positioning, our value scores, we expect to be a winner out of all of that.”

“Net-net, what we saw in 2008, 2009 and what we expect is going to continue is that we're going to be a net beneficiary on all of that.”

“We're still committed to our China business. They certainly have had a rough couple of years with all of the stops and starts with COVID, but we still expect to open roughly 800 restaurants this year.”

“We do still believe that longer term, there's leverage to be gained both in operating margin and specifically on the G&A side that should help that operating margin longer term, not in 2022, but longer term that should help improve that operating margin going forward.”

“We do still expect net unit growth in the US this year for the first time in several years, but it's certainly not an access to capital, as you mentioned.”

“But in general, the international side will get hit a little bit harder than the US and it will last a little bit longer later in the year than the US right now.”

“And three, different than the US, we don't see that moderating. Their increases will actually likely be higher in the third and fourth quarter than they were in the first and second quarter.”

“To your point on the international side, right now, the range is probably similar on average, the 12% to 14% for the year, but a couple of things there. One, we're probably at the higher end of that range on the international side.”

“On the labor side, we're probably seeing a little over 10% labor inflation right now.”

“For the full year in the US, we expect roughly 12% to 14% inflation. It's a little higher than that in the second quarter, likely a little higher than that in the third quarter. And then we expect to see it to moderate some in the fourth quarter.”

“And I expect digital, particularly as we bring on the UK, is going to be a performer for us.”

“Given macroeconomic conditions, we expect these inflationary pressures will continue to impact margins for the remainder of the year.”

“And the rest we expect to be pretty fully operational in the next few months or so.”

“I think for this year we still feel pretty good about that low to mid-40% range.”

“So from a modeling perspective, second quarter I think it's fair to use what we've said related to kind of the ongoing costs.”

“And that run rate is roughly $50 million is probably a little bit higher than that right now, partly because the Russian ruble has strengthened. So it could be $55 million or so.”

“but the overall envelope will probably be relatively similar at this year in that $2.2 billion to $2.4 billion range.”

“I think we expect a relatively similar range for the next few years.”

“On the labor side, in the U.S., it's probably over 10% right now.”

“We plan to expand that capability to the US, Canada and Australia later this year.”

“I think post-2022, again obviously depending on what happens with all these inflationary pressures, but if those get back down to a, I'll call it a low to a reasonable level, we believe there's opportunity to gain leverage on that operating margin line going forward.”

“That could impact openings this year one either from not being able to open or two from just our reevaluation of the timing of some openings.”

“That's still on track, but we are keeping a close eye on that because of everything that's going on in China as you mentioned and we have two.”

“Collectively, the investments we've made in our MCDs paid off in 2021, and we're confident they will drive even greater growth across the system in 2022 and beyond.”

“I'd say we expect 2022 to -- again, I'm assuming no more stops and significant restrictions. But assuming that, that is the case, I think our expectation is that as we progress through the year, we will see the markets that needed to recover, recover nicely through the year, and the markets that have been doing well continue to be strong.”

“then continue to get leverage on that as we grow sales, in our mind, will also help the operating margin leverage.”

“Right now, there isn't a specific plan to have a onetime event like that in 2022. But what we do need to do is continue to make sure that our folks are being paid at a similar level compared to industry, as the intent was last year. So that will continue to have some pressure, but we won't have kind of the onetime big bang, if you will.”

“As you go into this year, we are expecting that there is going to continue to be pressure on wages.”

“So there is some pressure, certainly, again, more early in the year, on margins and therefore, on cash flow also. We certainly don't expect it to wipe away what we gained either in 2021 or prior to that. But it certainly will pressure, again, both margins and cash flow.”

“On the international side, just to give a similar perspective, we saw about a 3% increase in food and paper costs in 2021, and that increase is supposed to be around double also in 2022, similarly more pressured early in the year.”

“Most of that pressure or more of that pressure will be in the first half of the year. And as the year progresses, we expect that to ease somewhat.”

“Going forward, post 2022, our expectation is of unit growth of about 3.5% to 4%. That will give about 2% contributions -- contribution to system-wide sales growth.”

“we're excited to deploy these standards in most markets across the globe over the next couple of years.”

“We also expect our strong cash flow growth to continue in 2022. And after the CapEx spend I just talked about, we'll continue to convert more than 90% of our net income to free cash flow as we have the last few years.”

“We anticipate net new restaurant growth of about 3.5% for the year.”

“Globally, we plan to open over 1,800 restaurants, with more than 500 of these openings in the U.S. and IOM segments.”

“About 40% of this will be allocated to our U.S. business, where we expect to have net restaurant unit growth for the first time in a few years.”

“And under current tax legislation, we expect our effective tax rate for the year to be between 20% and 22%.”

“Based on current interest in foreign currency exchange rates, we're projecting interest expense this year to be relatively flat compared to 2021.”

“Beyond 2022, we expect to gain leverage on both G&A and operating margin through continued sales growth.”

“In 2022, we anticipate our operating margin percent will continue to be in the low to mid-40s range as strong top line momentum and minimal other operating income will be hampered by significant commodity and labor inflation in the near term.”

“We expect that our 2021 net new restaurant openings of about 2%, along with planned expansion in 2022, will contribute about 1.5% to our system-wide sales growth in constant currencies this year.”

“While we expect that 2022 will be a year of continued progress, we also anticipate that many of the challenges we experienced in 2021 will endure.”

“Going forward, we're confident that our operating performance will continue to fuel growth in our already strong free cash flow profile.”

“Right now, we're at the lower end of that, more than 1.5% and likely not a lot above that for '22 because it really relates to "21 openings. But as we go on, I would expect that to get closer to that 2% contribution.”

“I think it is fair to say that we would expect our openings next year to be higher than they are in 2021 and continue to kind of increase that level for a little while”

“But certainly, I think what you're seeing right now and what we're expecting is that some of the benefits that we're seeing around larger check and the mix -- the channel mix that goes with that, we're expecting that to continue.”

“So, we don't anticipate certainly in the near-term average check returning back to the level it was at pre-pandemic.”

“And by mid-next year, we're going to have a loyalty in our top 6 markets, so I think the ability to give you a better idea of what exactly it's doing for the business, I think once we have that kind of scale and rollout, we'll be able to talk with even more specificity about it.”

“There will be some near-term moderation, potentially at restaurant margins as some of the labor costs and commodity costs kick in.”

“Relating to our operating margins, I think in our investor update last year, we talked about for 21 and 22, we thought operating margins would be pretty much in the mid-to-low 40's. I think that's still our thinking right now.”

“Going forward, I think we're still bullish on openings. We still expect our openings to increase both in our wholly-owned markets as well as our development of licensed markets next year.”

“And then going into next year from a food and paper cost perspective, we would expect our cost to be up relatively in line with the industry right now. That expectation is roughly mid-single digits.”

“Last quarter, I think I talked about how we were seeing roughly a 6% increase year-over-year in the U.S. We are still seeing that and that -- that's pretty much the level we expect for the full year 2021 over 2020 right around that 6%.”

“Then we expect to return all free cash flow to shareholders through a combination of dividends and share repurchases over time.”

“Based on current exchange rates, we expect currency to have a minimal impact on Fourth Quarter EPS, with an estimated full-year benefit of 0.21 to $0.23.”

“With our strong overall sales performance for the first three quarters of the year, we now expect system-wide sales to be up in the high-teens in constant currencies for the full year.”

“So, we plan to get even more aggressive in opening new restaurants in this market.”

“As we look ahead to the fourth quarter, we expect the IOM segment to maintain a relatively similar two-year comp trend as Q3.”