Gross Margin % is calculated as gross profit divided by its revenue. McDonald's's Gross Profit for the
three
months ended in Dec. 2023 was $3,654 Mil. McDonald's's Revenue for the
three
months ended in Dec. 2023 was $6,406 Mil. Therefore, McDonald's's Gross Margin % for the quarter that ended in Dec. 2023 was 57.04%.
The historical rank and industry rank for McDonald's's Gross Margin % or its related term are showing as below:
MCD'
s Gross Margin % Range Over the Past 10 Years
Min: 38.1 Med: 50.87 Max: 57.12
Current: 57.12
During the past 13 years, the highestGross Margin % of McDonald's was 57.12%. The lowest was 38.10%. And the median was 50.87%.
MCD's Gross Margin % is ranked better than 61.52% of 343
companies
in the Restaurants industry
Industry Median: 46.87
vs MCD: 57.12
McDonald's had a gross margin of 57.04% for the quarter that ended in Dec. 2023 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for McDonald's was 2.60% per year.
McDonald's Gross Margin % Historical Data
The historical data trend for McDonald's's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Restaurants subindustry, McDonald's's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
McDonald's Gross Margin % Distribution
For the Restaurants industry and Consumer Cyclical sector, McDonald's's Gross Margin % distribution charts can be found below:
* The bar in red indicates where McDonald's's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
McDonald's (NYSE:MCD) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
McDonald's had a gross margin of 57.04% for the quarter that ended in Dec. 2023 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
McDonald's Gross Margin % Related Terms
Thank you for viewing the detailed overview of McDonald's's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
McDonald's is the largest restaurant owner-operator in the world, with 2022 system sales of $116 billion across more than 40,000 stores and 115 markets. McDonald's pioneered the franchise model, building its footprint through partnerships with independent restaurant franchisees and master franchise partners around the globe. The firm earns roughly 60% of its revenue from franchise royalty fees and lease payments, with most of the remainder coming from company-operated stores across its three core segments: the United States, internationally operated markets, and international developmental/licensed markets.
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