McDonald’s Expected About 800 New China Stores in 2022 as CEO Praised Local Team

This is an English adaptation of a FoodBud historical article originally published on October 30, 2022.

McDonald’s recently disclosed its third-quarter results. Revenue was US$5.87 billion, down 5% year on year. Net profit was reported at about US$1.98 billion, down 8% year on year. (This is McDonald’s global net profit, not China-only.)

Segment Performance

In company-operated international markets, third-quarter revenue fell 30% year on year. Company-operated revenue in the U.S. rose 9% in the quarter.

For franchised operations, the International Developmental Licensed Markets and Corporate segment, which mainly includes markets such as China and Japan, grew 13% year on year.

2022 Store Outlook

McDonald’s expected 2022 capital expenditure of US$2 billion, mainly for new-store expansion in the U.S. and international operated markets. More than 40% of that spending was allocated to the U.S. market.

The company expected to open about 1,700 new restaurants in 2022:

• About 375 in the U.S. and international operated markets
• More than 1,300 in international developmental licensed and corporate markets

Because McDonald’s had shut down its Russia business during the year, expected net new openings were about 1,300.

As of September 30, McDonald’s had 39,980 restaurants globally, including 4,905 in China. By operating model, it had 2,050 company-operated stores and 37,930 franchised stores.

Key Operating Notes From Q3

McDonald’s also disclosed several operating points for the quarter:

• Company-wide systemwide sales grew 9.5%.
• Japan saw strong growth during the dinner daypart.
• China remained highly challenging because of the pandemic, but McDonald’s expected about 800 new stores there in 2022, a record high.
• Across its six largest markets, digital sales accounted for more than one-third of systemwide sales. More than 43 million active members on the app drove digital sales growth in Q3. In the U.S., McDonald’s had more than 25 million members.
• McDonald’s CEO said the biggest change in recent years had been delivery, which grew significantly after the pandemic.
• The CEO said the China team had performed well in a difficult period and was still expected to open about 800 stores against the broader headwinds. He noted that the market remained volatile until there was clarity on how it would manage the virus. McDonald’s CFO said the company remained optimistic about China’s outlook and expected some improvement in market conditions in 2023.

Note: store-opening expectations and 2023 outlook comments are historical figures from 2022.