McDonald

McDonald’s (MCD) faces US sales pressures and value perception concerns but is positioned for improvement in H2 and 2025, UBS said in a note Friday. McDonald’s can improve its pressured value perceptions with a renewed value focus, its scale and marketing advantages, strong core value attributes, and a history of solid performance during periods of heavy discounting, UBS said, adding that the company’s competitive advantages in digital, store remodels, marketing, and operations will continue to drive sales. The investment firm said that franchisee discussions and historical value analysis support its view that “multiple value-focused initiatives,” along with marketing and new product rollouts in the coming quarters should lead to a “positive inflection in US sales trends.” UBS lowered its US same-store sales estimates for the next few quarters due to challenges faced by the quick-service restaurant industry and feedback from franchisees but expects trends to improve sequentially through the year, […]

McDonald’s (MCD) saw its lowest quarterly same-store sales growth in Q1 since H1 of 2020 and real-time spending data indicate the slow trend will continue in Q2, BofA Securities said in a note Tuesday. The company has been facing declining customer traffic since Q3 2023 and is now lagging peers like Burger King and Wendy’s (WEN), highlighting issues with difficult comparisons and missed execution, BofA said. McDonald’s $5 combo deal aims to address the lack of a national value menu, but overall prices also need to moderate as the company’s cumulative price increase of 20% since 2022 surpasses both Burger King and Wendy’s, the analysts said. BofA said it sees the $5 combo as an urgent move and a temporary measure before introducing a more permanent value offer. The firm lowered the price objective on McDonald’s stock to $288 from $302 and reiterated its neutral rating.

McDonald’s is trying to make more uniformity across its system, and says it’s taking a global approach to how its app and other digital systems are funded by franchisees in the U.S. and four other countries next year. U.S. franchisees will pay a percentage of their digital sales for the app and other services, while McDonald’s says it will invest in new digital products and functions, the company says in a message viewed by WSJ. Restaurants increasingly rely on digital sales, as they are more efficient and allow for targeted marketing to consumers.

McDonald’s (MCD) reported Q1 non-GAAP earnings Tuesday of $2.70 per diluted share, up from $2.63 a year earlier. Analysts polled by Capital IQ expected $2.73. Total revenue for the quarter ended March 31 was $6.17 billion, compared with $5.90 billion a year earlier. Analysts surveyed by Capital IQ expected $6.17 billion. McDonald’s shares were down 2% in recent Tuesday premarket activity.

The following is a summary of the McDonald’s Corporation (MCD) Q1 2024 Earnings Call Transcript: Financial Performance: McDonald’s reported global comparable sales growth of nearly 2% in Q1 2024, marking the 13th consecutive quarter of positive growth. The average franchising cash flow remained strong despite the elevated cost environment. Adjusted earnings per share for the quarter were $2.70, an increase of about 2% in constant currencies. The adjusted operating margin for the quarter was nearly 45%. Inflation from 2023 will carry over into early 2024, impacting both food and paper costs as well as labor. Expectations for operating margins in 2024 are in a ‘mid to high 40s range,’ but it remains uncertain due to macroeconomic factors. Business Progress: McDonald’s is focusing on providing affordable meals by launching everyday value menus across several international markets. The McDonald’s mobile app and digital engagement initiatives are driving increased engagement and frequency from

By Emily Bary and Tomi Kilgore Revenue was slightly above forecasts, but same-store sales growth came up short McDonald’s Corp. said Tuesday its value message continued to resonate with customers during tough times, as the fast-food giant reported first-quarter revenue that rose above Wall Street’s estimates and said it will be testing a bigger burger in the coming months. That helped the stock (MCD) reverse an early sharp loss to trade little changed, even though the company missed profit expectations for the first time in more than two years and also missed on same-store sales. “And as we look to further build on our leadership in beef, or team of chefs from around the world have created a larger, satiating burger,” said Chief Financial Officer Ian Borden on the post-earnings call with analysts, according to an AlphaSense transcript. “We’ll be testing this burger in a few markets later this year,

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: We lower our 12-month target to $287 from $310, 23.4x our 2024 EPS, below MCD’s five-year average forward P/E of 25.6x, reflecting weaker customer traffic trends. We cut our 2024 EPS to $12.26 from $12.30 and 2025’s to $13.41 from $13.53. MCD posted Q1 adj-EPS of $2.70, $0.03 below consensus. Revenue of $6,169M (+ 4.6% Y/Y) was in line with consensus. Adj. operating income rose 2.1% Y/Y to $2,771M vs. $2,825 consensus, with margin contracting 110 bps to 44.9%. Same-store sales rose by 1.9% vs. 2.4% consensus, driven by growth in the U.S. (+2.5%) and Int’l Operated Markets (+2.7%), partly offset by Int’l Developmental Licensed Markets (-0.2%), largely due to the war in the Middle East. Despite a tough macro backdrop, where most consumers seek superior value,

McDonald’s is set to report first-quarter earnings on Tuesday before the market opens. Despite the struggles of the fast-food industry, the Big Mac maker is likely to hold up better. Analysts polled by FactSet expect McDonald’s to post $2.72 per share earnings and $6.16 billion in sales for the first three months of 2024, marking a 3.4% and 4.4% growth from the same quarter a year ago, respectively. Inflation has taken a toll on consumer spending. Lower-income households, the primary customers of fast-food chains, are squeezed particularly hard, especially after food-stamp assistance was cut and student loan payments resumed last year. McDonald’s raised prices by 10% last year. Management noted that lower-income consumers have visited its stores less frequently and are spending less when they do. Meanwhile, price gains at grocery stores have slowed down this year. “Some of those consumers are just choosing to eat at home more often,”

By Denny Jacob McDonald’s agreed to buy Alonyal, which owns and operates the burger chain’s restaurants in Israel. The Oak Brook, Ill.-based company said it will own Alonyal’s restaurants and operations and that employees will be retained on equivalent terms. Alonyal grew its presence to 225 restaurants since bringing McDonald’s brand to Israel more than 30 years ago. “McDonald’s remains committed to the Israeli market and to ensuring a positive employee and customer experience in the market going forward,” said Jo Sempels, president of international developmental licensed markets at McDonald’s. McDonald’s is among the numerous restaurant companies that have been drawn into the Israel-Hamas war. In October, McDonald’s Israel business run by a local franchisee said on social media that it was providing free meals to Israeli soldiers. Other McDonald’s franchisees in the Middle East said they would donate to relief efforts in Gaza. Those moves drew angry criticism online,

TD Cowen analyst Andrew Charles reiterates McDonald’s (NYSE:MCD) with a Outperform and maintains $325 price target.

McDonald’s chicken sales are growing faster than beef, but the company has more work to do to claim more share in the market, the company says at an investor conference. Chicken counts for some of the chain’s biggest selling brands, but McDonald’s needs more of them, the company says. McDonald’s coffee is also too inconsistent as its restaurants use 100 different coffee machines across its global restaurants, and the company has more to do to improve its taste, the chain says.

By Angela Palumbo McDonald’s has been feeling the pressure as more people shift to grocery shopping as opposed to eating at restaurants. The fast-food chain has several plans to keep customers coming in for its Big Macs and Chicken McNuggets. During a presentation at the UBS Global Consumer and Retail Conference on Wednesday, fast-food giant McDonald’s noted a shifting trend of customers that has negative implications for the business. “You’re starting to see food at home inflation versus food away from home getting back to its more, I think, historical dynamic, which means I think some of those consumers are just choosing to eat at home more often,” said Chief Financial Officer Ian Borden. According to the U.S. consumer price index for February, prices for food at home have increased 1% over the last 12 months while prices for food away from home have jumped 4.5%. Consumers also are facing