Comps Outlook Revision
Q: Are U.S. and IOM comps still expected in 3-4% range?
A: Management indicated that due to significant macro headwinds, they expect comparable sales growth in the U.S. and international markets to be below the historical 3-4% range. " They note that industry traffic is either flat or declining, affecting their outlook. "

Operating Margin Guidance
Q: Can operating margin guidance be tightened from wide range?
A: Management acknowledges the mid- to high 40s operating margin guidance range is wide due to macro uncertainties. " They remain confident in driving leverage over time but cannot tighten expectations at this point. "

U.S. Consumer Behavior
Q: What are you seeing with U.S. consumer behavior?
A: Consumers are being very discriminating in their spending due to inflation, with all income cohorts seeking value. " McDonald's focuses on offering strong value and improving operations, including better speed of service and increased customer satisfaction. "

National Value Platform Plan
Q: What's the plan for a national value platform in the U.S.?
A: Current U.S. value offerings are fragmented across 50 different local approaches. " Management sees an opportunity to drive better awareness with a strong national value proposition, which could quickly impact business results. "

Current Pricing and Inflation Outlook
Q: What's current pricing and inflation outlook?
A: In the U.S., most pricing is carryover with no new increases. " They expect high single-digit labor inflation due to factors like California wage increases and low single-digit food and paper inflation returning to historical levels. "

Core Menu Pricing Strategy
Q: Is there a need to address core menu pricing variations?
A: Management believes local pricing capabilities allow adjustments based on competition, maintaining a decent position overall. " They acknowledge the opportunity to better communicate value on core menu items to consumers. "

Franchisee Support and Margins
Q: Will you support franchisees in investing in value?
A: Franchise restaurant margins are now back to 2019 levels. " McDonald's does not step in to subsidize pricing but works with franchisees to balance national value initiatives without significantly affecting their profitability. "

International Business Trends
Q: How is international business performing amid headwinds?
A: Macro headwinds are more significant in several large international markets, continuing into Q2. " Management has provided some support to franchisees in affected regions but not at significant levels. "

CosMc's Early Learnings
Q: What are early learnings from CosMc's tests?
A: It's too early to report significant findings as current interest is curiosity-driven. " Success will be measured by comparable or stronger ROIC versus traditional McDonald's, based on unit volumes, margins, and capital costs. "

Customer Satisfaction Scores
Q: Why has your satisfaction gap to industry narrowed?
A: Despite overall improvements, the gap has narrowed due to losing some relative superiority on affordability in certain markets. " Management is focusing on enhancing value perception to address this. "

Impact of Economic Slowdown
Q: How does the slowdown affect McDonald's and franchisees?
A: While lower-income consumers are pressured, McDonald's often benefits from consumers trading down. " Franchisees are in a strong financial position and aligned on addressing value initiatives. "

Potential National Value Platform Details
Q: How could a national value platform work given cost differences?
A: Management believes they can develop a national value proposition despite varied costs, as competitors face similar challenges. " The focus is on entry-level price points, meal deals, and breakfast value. "

Differentiating the New Value Platform
Q: How will this value platform differ from past attempts?
A: Previous national value programs like the $1 $2 $3 Menu eventually drove strong results. " The key difference now is driving consumer awareness quickly to impact transactions. "