McDonald's First Quarter Earnings Report

(Tuesday, April 25, before the open)

McDonald's has been implementing changes to its menu, restaurants and technology, so this report will be a benchmark progress report on those efforts. With a new app that allows customers to order ahead and pay online, investors will be interested to hear if McDonald's sees more room for optimism on its 2017 earnings prospects

MCD faces tough comparisons due to the prior-year launch of All-Day Breakfast, heightened competition, and lower food prices at grocery stores

Expectations are high for McDonald's. The stock is up 10% since its fourth quarter report. The S&P 500 has risen 4.4% over the same period.  The stock, which is trading at an all-time high, could be at risk of a sell-off if McDonald's fails to live up to the expectations with its results and/or outlook.


MCD 4Q Notes:

  • Expects to shift to more of a long-term focus in 2017
  • Doesn't expect food deflation to be as significant in 2017
  • Expects to refranchise 3500 restaurants by mid 2017 and 4000 by end of 2018
  • Sees $1.7 billion in capex in 2017, $600 million of which will be in new restaurants
  • Sees 900 new restaurants mostly in new markets in Europe
  • Remains on track to achieve $500 million net G&A savings target by end of 2018
  • Expects to return $22-24 billion for the three years ending 2019

Other quick service restaurant companies

  • YUM Brands (YUM)
  • Wendy's (WEN)
  • Jack in the Box (JACK)
  • Restaurant Brands International (QSR) [parent of Burger King and Tim Hortons]
  • Sonic (SONC)
  • Shake Shack (SHAK)
  • Red Robin Gourmet (RRGB)

Related specialty restaurant companies

  • Starbucks (SBUX)
  • Dunkin Donuts (DNKN)
  • Panera Bread (PNRA)
  • Consumer Discretionary Select Sector SPDR (XLY)