TonyBaggett McDonald’s (NYSE:MCD) reported second-quarter earnings on Monday which failed to meet expectations in a number of metrics, but especially with regard to comparable sales, which were especially weak due to a slowdown in industry traffic. With customers frequenting fast-food restaurants less often during the second-quarter, McDonald’s has seen a decline in comparable sales in its key markets, including in the U.S. and Europe. It was the first comparable sales decline for McDonald’s since FY 20 ...

After a challenging second quarter, McDonald's executives told restaurant operators and analysts they are refocusing on how to recapture consumers with deals, as they pushed for an extension of the its $5 value meal platform.In a memo to the U.S. system obtained by CNBC on Monday, U.S. President Joe Erlinger said McDonald's struggled to sell diners on affordability, adding that he expects "industry and competitive challenges" to continue throughout the year. Erlinger encouraged operators to look ahead to bu ...

Core Insights - McDonald's stock rose 4% in intraday trading despite second-quarter earnings falling short of analyst expectations [1][4] - The company reported success with the $5 value meal launched last month, with nearly all U.S. locations approving its extension [1][3] - Executives noted sales growth among lower-income consumers, indicating a positive response to the value meal amid rising prices [2] Sales Performance - Comparable-store sales remained lower in July, but foot traffic has increased, with many customers purchasing additional items, leading to average tickets above $10 [4] - The company is evaluating strategies to enhance consumer awareness of its value offerings, including expanding the value menu and local deals [3] Strategic Outlook - McDonald's leadership emphasized the need for a broader value platform to attract consumers, rather than relying on limited offerings [3] - Executives are optimistic about extending the $5 meal deal beyond the initial four weeks due to its popularity [3]

When stocks are going down, buyer's remorse rules the market. Traders and investors purchase shares only to lose money when the price heads lower. Not surprisingly, they regret their decision to buy.When a stock finally reaches a bottom, buyer's remorse gradually fades until there is no more. This important market dynamic may be about to appear on the chart of McDonald’s Corporation MCD, which reported earnings Monday morning. That is why McDonald’s is our Stock of the Day.When prices move lower, some of th ...

ermingut McDonald's Corporation (NYSE:MCD) share were up about 1% in pre-market trading, after the company reported results for the June quarter. Interestingly, the positive price action was building on the backdrop of a miss on both sales and earnings. This suggests that peak pessimism has likely been priced in ahead of earnings, and long-term focused investors are now looking to buy the dip in one of the world's most valuable brands. Personally, I also think that MCD shares have bottomed out, and I am ...

McDonald's says that high prices have contributed to its falling sales.Global comparable sales dropped 1%. Its CEO said the company hadn't homed in enough on value.He said customers are looking for more deals and either buying fewer items per order or cheaper items. Sign up to get the inside scoop on today’s biggest stories in markets, tech, and business — delivered daily. Read preview Thanks for signing up! Access your favorite topics in a personalized feed while you're on the go. Email addre ...

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $2.97 for the quarter, a decrease of about 5% in constant currencies compared to the prior year [25] - Top line results generated over $3.5 billion of restaurant margins for the quarter, with a year-to-date adjusted operating margin of over 46% [26] - The effective tax rate for the quarter was nearly 21%, contributing to the decrease in earnings [25][26] Business Line Data and Key Metrics Changes - The US segment has seen significant growth in loyalty, with over 20% of system-wide sales coming from loyalty members [14] - Chicken sales are now on par with beef sales, driven by the success of the McCrispy Chicken sandwich, which is offered in more than 55 markets [10] - The company continues to innovate its core menu, with the introduction of The Big Arch burger being piloted in three international markets [9] Market Data and Key Metrics Changes - The QSR sector has slowed significantly in major markets, including the US, Australia, Canada, and Germany, with declines in comparable sales globally [6] - Consumer sentiment remains low in most major markets, leading to more discretionary spending and a decline in traffic [33] - In some markets like Germany, Spain, and Poland, flexible value programs have allowed for quick adjustments that drove market share gains [12] Company Strategy and Development Direction - The company is focused on reigniting share growth in all major markets despite current pressures, emphasizing the importance of value execution [7] - The Accelerating the Arches strategy remains the playbook for the business, focusing on gold standard execution and growth pillars [13] - The company aims to expand its restaurant footprint to 50,000 locations by the end of 2027, leveraging its competitive advantages [30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by a more discriminating consumer, particularly among lower-income households, and the impact of external pressures like the war in the Middle East [6][11] - The company is committed to addressing value opportunities and enhancing customer experience to drive traffic and sales [17][18] - Management remains confident in the long-term strategy, emphasizing the importance of customer insights and competitive advantages [19] Other Important Information - The company has recognized the need for a broader value platform in several markets to meet changing consumer expectations [34] - Digital penetration continues to grow, with loyalty membership reaching 166 million members, representing 25% of system-wide sales [10] - The company is committed to sustainable strategies that ensure profitability for both operators and McDonald's [48] Q&A Session All Questions and Answers Question: What changed significantly from the consumer's perspective relative to your expectations in the last 6 to 12 months? - Management noted that the slowdown in consumer spending has broadened beyond low-income households to larger groups, with consumers becoming more discretionary in their spending habits [33] Question: How do the challenges in your key markets differ from the US in terms of market share? - Management indicated that while the US is in a state of searching for the right value message, international markets have established value platforms that need to be sharpened to meet current consumer expectations [36][38] Question: What gives you confidence that digital can drive value going forward? - Management expressed confidence in the digital business but acknowledged that only 25% of customers are currently on the digital platform, indicating room for growth [41] Question: How effective has the $5 meal deal been? - The $5 meal deal has performed as expected, improving brand perceptions and increasing trial rates among lower-income consumers, although it has not yet translated into significant sales growth [43] Question: What are the margin implications for the balance of the year? - Management expects company-operated margins to be down slightly from 2023 levels but remains optimistic due to lower inflation in food and paper costs [71]

McDonald's Corporation (MCD) reported second-quarter 2024 results, with earnings and revenues missing the Zacks Consensus Estimate. The top and bottom lines decreased on a year-over-year basis.Chairman and CEO Chris Kempczinski expressed strong belief in the company's "Accelerating the Arches" strategy, emphasizing its suitability for the business. Kempczinski noted that as consumers become more selective with their spending, the company remains dedicated to consistently delivering dependable value. Additio ...

McDonald's executives acknowledged Monday that diners consider the company's prices too high as lower-income consumers balk after years of high inflation.During the company's second-quarter earnings call Monday, executives said that they are taking a "forensic approach" to evaluating prices and trying to create value. The company posted worse-than expected second-quarter earnings, as same-store sales declined across every division."We recognize that in several large markets, including the U.S., we have an o ...

McDonald’s sales fell for the first time since 2020 as lower-income consumers stayed home.The fast food giant released quarterly earnings Monday (July 29) showing a 1% dip in sales, with management saying the company is feeling the same pressures as much of the quick-service restaurant (QSR) market.“Beginning last year, we warned of a more discriminating consumer, particularly among lower-income households,” CEO Chris Kempczinski said during an earnings call.“And as this year progressed, those pressures hav ...