McDonald's (NYSE:MCD) just closed the books on a successful 2018 that marked its second straight year of robust global sales growth, higher customer traffic, and spiking profits.

However, the fast-food titan failed to stem a nagging growth problem in the all-important U.S. market. That puts the pressure on executives to demonstrate that the billions of dollars they've allocated toward the rebound project will make a difference at home.

Let's take a closer look:

 Metric

Q4 2018

Q4 2017

Year-Over-Year Change

Revenue

$5.2 billion

$5.3 billion

(3%)

Net income

$1.4 billion

$699 million

108%

Earnings per share

$1.82

$0.87

115%

Data source: McDonald's financial filing. 

What happened this quarter?

Sales growth at existing locations held steady for the third straight quarter as the chain continued to reap financial benefits from its shift toward a fully franchised operating model. The hoped-for rebound in the U.S. market, meanwhile, hasn't quite materialized.

Young adults eating fast food at a mall cafeteria.

Image source: Getty Images.

Highlights of the period include the following:

  • Global comparable-store sales increased 4% to match the results for the fiscal third and fourth quarters. McDonald's broader revenue fell 3% due to its refranchising program, which has seen the proportion of company-owned restaurants fall to about 6% today from 15% in 2015.
  • The U.S. segment, a key focus for the management team, expanded 2.3% but showed a slightly smaller growth rate than the prior quarter. Customer traffic fell 2.2% for the full year, but that slump was offset by higher average spending.
  • McDonald's posted positive shopper traffic in each of its other geographic segments, leading to a 0.2% uptick globally compared to a 1.9% increase in 2017. Global comps rose 4.5% for the year for a slowdown from last year's 5.3% boost.
  • Operating profit was flat after accounting for currency shifts and the impact of a few noncash charges. Its bigger-picture results showed healthy improvement here, with operating margin landing at 43% for the year, up from 39% in 2017.
  • The chain generated $7 billion of operating cash for the year, up 14%.

What management had to say

In a press release, CEO Steve Easterbrook focused on McDonald's broader fiscal year wins. "Our performance in 2018 was strong," he said, "with broad-based momentum across each of our global segments."

Putting the success into long-term perspective, Easterbrook noted that the chain "has now achieved 14 consecutive quarters of positive global comparable sales ... and two consecutive years of global guest count growth for the first time since 2012."

Looking ahead

McDonald's spent nearly $2 billion modernizing and upgrading a large portion of its U.S. stores last year. While the investment hasn't yet produced a notable growth spike, management appears to be happy with the early results. In fact, it plans to spend nearly the same amount on U.S. locations in 2019 to modernize 2,000 more restaurants and add features like delivery functionality and digital kiosk ordering.

Easterbrook and his team have pointed to faster sales growth outside of the U.S. as evidence that these upgrades ultimately drive increased shopper visits and higher spending. Investors will find out in 2019 whether that's also the case for the chain's home market.

In the meantime, McDonald's robust cash flow and spiking profitability should fund huge cash returns to shareholders, with $9 billion expected to be spent this year in stock repurchases and dividend payments.

Demitrios Kalogeropoulos owns shares of McDonald's. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.