Why McDonald’s Corporation (MCD) Earnings Need to Be Impressive

Page 1 of 2

McDonald’s Corporation (NYSE:MCD) is scheduled to release its quarterly earnings report on Monday, and its stock has climbed to the $100-per-share mark in approaching all-time record-high levels. But disappointing results for McDonald’s earnings in past quarters have investors worried that the company might not deliver the fundamental strength it needs to match up to its stock’s performance.

McDonald’s Corporation (NYSE:MCD) has been one of the most resilient members of the Dow Jones Industrials , with notable gains during the bear market year of 2008 that proved its ability to weather recessions with its focus on low price points. But lately, its growth forays have run into some resistance. Let’s take an early look at what’s been happening with McDonald’s over the past quarter, and what we’re likely to see in its quarterly report.

Stats on McDonald’s

Analyst EPS Estimate $1.40
Change From Year-Ago EPS 6.1%
Revenue Estimate $7.10 billion
Change From Year-Ago Revenue 2.6%
Earnings Beats in Past 4 Quarters 1

Source: Yahoo! Finance.

Can McDonald’s earnings get back on track this quarter?
Once again, analysts have reined in their expectations about McDonald’s Corporation (NYSE:MCD) earnings over the past few months, cutting their estimates for the June quarter by $0.04 per share, and reducing their full-year 2013 consensus figures by twice that amount. The stock has also had trouble pushing higher from current lofty levels, actually falling 2% since mid-April.

McDonald's Corporation (NYSE:MCD)McDonald’s Corporation (NYSE:MCD) has faced some big challenges lately, as its first-quarter earnings report in April produced negative same-store sales and disappointing earnings. Not only did operating income drop on a meager 1% gain in total revenue, but the company is seeing a troubling rise in customer complaints that jeopardizes the entire franchise’s reputation. This quarter’s same-store sales have been a mixed picture, with April’s figure falling 0.6%, but May’s comps showing a 2.6% rise.

McDonald’s Corporation (NYSE:MCD) is taking aggressive steps to try to answer those challenges. The company expects to spend about $1 billion this year on store renovations that should update its image, and give it an appeal that rival Yum! Brands, Inc. (NYSE:YUM) can’t match. McDonald’s believes that sales could rise 6% to 7% after renovations are completed, and as the company implements expanded hours and changes to its menu, McDonald’s hopes to reverse some of the headwinds it has faced in its U.S. business.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!