McDonald's (NYSE:
MCD) is scheduled to report its fourth-quarter and full-year results Wednesday, January 23, before the markets open. Investors will be looking to see whether a management shake-up in the United States and renewed emphasis on value has paid off, as well as the impact of the ongoing concerns in Europe and the signs that growth in China may be slowing.
Expectations
Analysts on average predict that McDonald's will report that revenue for the quarter rose marginally year-over-year to $6.89 billion. And per-share earnings are expected to come to $1.33, which would be the same as in the comparable period of last year. That consensus earnings estimate is the same as it was 60 days ago. But note that the earnings per share (EPS) fell short of the consensus estimates in the previous two quarters. The third-quarter EPS of $1.47 missed the street view by less than three percent.
McDonald's attributed its third-quarter results to increasing competition in the United States and the weakening economy abroad, and it warned that October same-store sales were trending negative. The company said it would step up advertising for its dollar menu and bring back the popular McRib sandwich nationally. The share price pulled back more than two percent in the days following the third-quarter report.
The analysts' consensus forecast for the full year calls for $5.31 per share earnings on revenue of $27.50 billion. That would be up from $5.27 per share and $27.01 billion in the previous year. That consensus EPS estimate is unchanged in the past 60 days as well.
The Company
McDonald's remains the world's largest chain of hamburger fast-food restaurants, serving about 68 million customers daily at approximately 34,000 restaurants in 120 countries around the world. This Dow Jones Industrial Average component was founded in 1940 and is now headquartered in Oak Brook, Illinois. Donald Thompson became president chief executive in July 2012.
Competitors include fast-food companies Burger King Worldwide (NYSE:
BKW), Wendy's (NASDAQ:
WEN) and Yum! Brands (NYSE:
YUM), and increasingly fast-casual restaurants such as Chipotle Mexican Grill (NYSE:
CMG) and Panera Bread (NASDAQ:
PNRA). Burger King went public again last year and is expected to report no sequential growth in EPS for the fourth quarter. Wendy's released preliminary fourth-quarter results last week, missing on the top line but beating on the bottom line. Yum! Brands is expected to post flat revenues when it reports in February.
During the three months that ended in December, McDonald's saw its global same-store sales decline in October for the first time in nine years, replaced the president of its McDonald's USA unit, announced it would sell packaged coffee in Canada and install iPads for customer use at some locations.
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