McDonald's (MCD) reported lower than expected comparable sales growth, lower than expected revenue but higher earnings per share (EPS) for the fourth quarter and full year of 2023, sending its stock price slightly higher in pre-market trading.
Key Highlights:
- Comparable sales: Global comparable sales increased 3.4% year-over-year (YoY), which was lower than Bloomberg estimate of 4.79%. US comparable sales grew 4.3%, while International Operated Markets and International Developmental Licensed Markets increased 4.4% and 0.7%, respectively. Estimations for both figures were higher than prints for Q4 2023.
- Earnings: Adjusted EPS of $2.95 came in above the analyst consensus estimate of $2.82, representing a 14% increase YoY. Revenue of $6.41 billion was slightly below the estimate of $6.45 billion but still grew 8.1% YoY.
- Profitability: Operating income rose 8.5% YoY to $2.80 billion. The company expects its 2024 operating margin to be in the mid-to-high 40% range.
- Expansion: McDonald's plans to open more than 2,100 new restaurants globally in 2024, with over 1,600 net additions. The company expects to invest $2.5 to $2.7 billion in capital expenditures, with a focus on the US and International Operated Markets.
- Outlook: The company sees 2024 free cash flow conversion rate in the 90% range and expects year-over-year interest expense to increase by 9% to 11%. Despite "macro challenges," McDonald's CEO expressed confidence in the business's resilience.
Market Reaction:
McDonald's stock price rose about 0.3% in pre-market trading on the news. Analysts were generally positive on the results, despite that comparable sales growth came out below expectations, as the company's expansion plans were more important for the future.
The company has 33 buys recommendation, 10 holds and 0 sells. The stock increased 0.18% this year and 12.86% in 12 months.
Key data for MCD.US. Source: Bloomberg Finance LP, XTB
MCD stock is flat this year but is only 1.5% short to all-time high. Source: xStation5
Market Wrap: European stock markets are up 🚀 Banks, defense, and tech in the spotlight 💡
Daily summary: Conflict escalates again - indices down, oil up
Palantir preview: Another record or another sell-off?
Will GameStop buy eBay? The numbers suggest otherwise
The material on this page does not constitute as financial advice and does not take into account your level of understanding, investment objectives, financial situation or any other particular needs.
All the information provided, including opinions, market research, mathematical results and technical analyses published on the website or transmitted to you by other means is provided for information purposes only and should in no event be interpreted as an offer of, or solicitation for, a transaction in any financial instrument, nor should the information provided be construed as advice of legal or fiscal nature.
Any investment decisions you make shall be based exclusively on your level of understanding, investment objectives, financial situation or any other particular needs. Any decision to act on information published on the website or transmitted to you by other means is entirely at your own risk. You are solely responsible for such decisions.
If you are in doubt or are not sure that you understand a particular product, instrument, service, or transaction, you should seek professional or legal advice before trading.
Investing in OTC Derivatives carries a high degree of risk, as they are leveraged based products and often small movements in the market could lead to much larger movements in the value of your investment and this could work against you or for you. Please ensure that you fully understand the risks involved, taking into account your investments objectives and level of experience, before trading, and if necessary, seek independent advice.
