Why McDonald’s Stocks are jumping today
McDonald’s (NYSE: MCD) Stocks were acquired during Monday trading. The fast food giant stock price has risen 4.5% as of noon. S&P 500 (snpindex: ^gspc) and 1.1% gain Nasdaq Composite (Nasdaqindex: ^ixix).
McDonald’s reported results for the fourth quarter before the market opened this morning, with sales and revenue performance for that period actually fell below expectations. However, despite the lack of Wall Street top and bottom line goals, the business has shown signs of improvement in key areas.
McDonald posted last quarter Non-gaap (Generally Accepted Accounting Principles) Revenue per share of $2.83, $63.9 billion. For comparison, the average analyst estimate required to list adjusted profits of $2.86 in revenue of $6.48 billion. Overall revenue fell 0.3% year-on-year over the period, while adjusted earnings per share fell 4%.
Despite the decline in sales, investors are finding some bright spots in their revenue composition. Sales in the same U.S. stores fell 1.4% compared to the same period last year due to a decrease in spending per check, but sales in the International Operating Market segment actually increased by 0.1%. It was predicted by Wall Street. Meanwhile, revenues in the international developmental licensing market segment increased 4.1% year-on-year.
McDonald’s has seen several persistent challenges related to the E. coli outbreak last year, but management expects these issues to be in the rearview mirror by the second quarter. As a result, profitability is expected to improve significantly.
McDonald’s says it will continue to focus on building digital ordering platforms and prioritizing value-oriented menu products. Meanwhile, the company says it has already seen improvements in average check prices and customer traffic in the US and other markets.
The company expects the impact of the menu and digital ordering initiatives and improved check sizes and customer traffic trends will bring about improvements in the outcomes that will actually begin to appear in the second quarter. Despite a 21% rally on the S&P 500 Index, McDonald’s stock has only grown by 6% last year, so if trends shape to management expectations, the company’s stock price is room to run There is.