McDonald's faces a drop in sales
- Decline in global sales:
- McDonald's $MCD+0.6% saw a 1% decline in quarterly comparable sales, the first decline in 13 quarters.
- Analysts had expected a 0.53% increase, but the reality fell short of expectations.
- Competitive Pressure:
- McDonald's $MCD+0.6% and other chains such as Domino's, Burger King, Wendy's and Starbucks introduced affordable packages and deals in the $3-5 price range.
- Financials:
- McDonald's $MCD+0.6% reaffirmed its operating margin forecast for 2024, but the company's stock is down 15% year-to-date.
- Adjusted earnings were $2.97 per share, down from $3.17 in the prior year.
- Regional challenges:
- Comparable sales in the U.S. fell 0.7%, while international markets saw a 1.1% decline, with France posting particularly weak results.
- Business segments in China and the Middle East were impacted by a slower recovery and boycotts related to the Gaza conflict.
- Next steps:
- McDonald's $MCD+0.6% will continue to offer $5 meals in August at most U.S. locations.
- The company plans to use more than half of its capital budget to open new restaurants in the U.S. and international markets.
It's still a great company, but I don't have it listed in my portfolio.
In fact, the price has been reflecting those results for some time without investors knowing it. They could only have suspected it. But in the end, it wasn't that bad, and so the price went up yesterday.