McDonald’s Corporation (NYSE: MCD)
Shares of McDonald’s gained more than 4% on Monday to trade at $165 after the company’s first-quarter earnings surpassed the expectations of Wall Street.
The company attributed its strong performance during the first three months of 2018 to price hikes in its restaurants. The revenue decline was due to the re-franchising initiative that company has been undertaking since January. At the end of last year, the company was 92% franchised.
MCD Earnings & Outlook
For the first-quarter of fiscal 2018, analysts were expecting the fast-food giant to report adjusted earnings per share of $1.67 and a revenue of $4.93 billion. However, the company surpassed that estimate by announcing adjusted earnings per share of $1.79 on a revenue of $5.14 billion.
In the same quarter last year, the company’s adjusted EPS was $1.47 per share on a revenue of $5.68 billion. McDonald’s said that menu price hikes helped lift its sales by 2.9% in the U.S, while global sales climbed by 5.5% at restaurants open for at least a year.
Global sales were strong, especially in Germany and the United Kingdom. Mobile delivery, ordering and kiosks are already available in many of these locations. The company has also rolled out many other initiatives in the U.S. which are also performing well.
McDonald’s CEO Comments
McDonald’s Chief Executive Officer Steve Easterbrook made the following statement on the company’s earnings: “Guided by our Velocity Growth Plan, we are satisfying the rising expectations customers have for the taste and quality of our food and greater convenience as they visit our restaurants or enjoy meals delivered to their homes and offices. We are confident in the strategies guiding our business for today and for long-term sustained growth into the future.”
McDonald’s Corporation Company Profile
McDonald’s Corporation franchises and manages McDonald’s restaurants. The segments of McDonald’s are as follows: US, Foundation Markets and Corporate, International Lead Markets; and High Growth Markets. The US segment enables customers to customize their sandwiches by offering a platform with authentic ingredients.
The High Growth Markets division revolves around people, design, and menu innovation to boost the experience of customers. Through the International Lead Markets segment, the company works on expanding its brand of McCafé coffee and deploying EOTF restaurants. Foundational Markets and Corporate division refers focuses on increasing convenience to customers and running great restaurants.
The competitors of the company include Subway, KFC, Burger King, Wendy’s, Starbucks and Taco Bell. McDonald’s was founded in 1955 and its head office is located in Oak Brook, Illinois. –Reuters
