McDonald's Corporation stock research
FY2023 Q2
McDonald's (MCD) Gross Margin — Quarter Ended Jun 30, 2023
Revenue increased compared to both the prior quarter and the same quarter last year, while cost of revenue rose at a slower pace, leading to higher gross profit and an improved gross margin. The gross margin strengthened sequentially and year-over-year, reflecting a favorable relationship between revenue growth and cost control.
Gross margin takeaway
Quarter ended Jun 30, 2023 · FY2023 Q2
Revenue increased compared to both the prior quarter and the same quarter last year, while cost of revenue rose at a slower pace, leading to higher gross profit and an improved gross margin. The gross margin strengthened sequentially and year-over-year, reflecting a favorable relationship between revenue growth and cost control.
- The strongest observable margin driver is the sustained expansion of gross margin, which improved both sequentially and year-over-year. This was supported by revenue growth outpacing the increase in cost of revenue.
- Compared to the immediately preceding quarter, revenue, gross profit, and gross margin were all higher, while cost of revenue was slightly higher. Versus the same quarter one year earlier, all metrics improved, with gross margin showing the most notable strengthening.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
90.5%
Gross profit
$5.9B
Revenue
$6.5B
Cost of revenue
$618.0M
Quarter-over-quarter change
+0.6 pts
Year-over-year change
+0.8 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 31, 2023 | $5.9B | $5.3B | $598.0M | 89.9% |
| Jun 30, 2023 | $6.5B | $5.9B | $618.0M | 90.5% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2023
+0.6 pts
Year-over-year change
Jun 30, 2022
+0.8 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the sustained expansion of gross margin, which improved both sequentially and year-over-year. This was supported by revenue growth outpacing the increase in cost of revenue.
Compared to the immediately preceding quarter, revenue, gross profit, and gross margin were all higher, while cost of revenue was slightly higher. Versus the same quarter one year earlier, all metrics improved, with gross margin showing the most notable strengthening.
Monitor the trajectory of cost of revenue relative to revenue, as its slower growth has been a key factor in margin improvement.