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McDonald's (MCD) Q4 Earnings and Revenues Lag Estimates
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McDonald's Corporation (MCD - Free Report) reported fourth-quarter 2020 results, wherein earnings and revenues missed the Zacks Consensus Estimate. Notably, the top line missed the consensus mark after beating the same in the preceding four quarters.
Robust drive-thru presence, and investments in delivery and digital over the past few years have aided the company amid the ongoing crisis. Robust digitalization will continue to help the company to drive long-term growth and capture market share.
McDonald's president and CEO Chris Kempczinski said, “2020 will be remembered as one of McDonald's (MCD - Free Report) most challenging, yet inspiring, moments in our long history. The resilience of the McDonald's System was on display – making safety and service a priority, putting our customers and people first, and running great restaurants.”
The company reported adjusted earnings of $1.70 per share, which missed the Zacks Consensus Estimate of $1.75. Moreover, the bottom line declined 14% year over year. Meanwhile, foreign currency translation had a negative impact of 4 cents per share on earnings in the quarter under review.
Revenues & Comps Discussion
In the fourth quarter, revenues of $5,313.8 million missed the Zacks Consensus Estimate of $5,320 million. Moreover, the top line declined 2% year over year. This downtrend was due to the coronavirus pandemic. Moreover, on a constant-currency basis, revenues decreased 3% year over year.
At company-operated restaurants, revenues were $2,233.3 million, down 5% year over year. Moreover, the same at franchise-operated restaurants amounted to $2,985.3 million, flat year over year.
In the quarter, global comps declined 1.3%, against growth of 5.9% in the prior-year quarter. Comps declined for the fourth straight quarter after reporting positive comps in the trailing 19 quarters.
McDonalds Corporation Price, Consensus and EPS Surprise
U.S.: Comps at this segment rose 5.5% in the fourth quarter, compared with increase of 5.1% in the prior-year quarter. The company’s comps in the quarter benefited from robust average check growth and strong performance at all major daypart.
International Operated Markets: Comps at this segment declined 7.4% year over year, against a gain of 6.2% in the year-ago quarter. Comps were hurt by dismal comps particularly in France, Spain, Germany and Italy. However, the company witnessed positive comps in Australia and the U.K. during the quarter under review aided by drive-thru performance.
International Developmental Licensed Segment: The segment’s comparable sales decreased 3.6% in the third quarter. In the prior-year quarter, the segment’s comps had risen 6.6%. Comps were negatively impacted by dismal comps in Latin America and Asia, which was marginally offset by robust comps in Japan.
Other Financial Information
The company ended the quarter with cash and cash equivalent of $3,449.1 million, compared with $898.5 million at the end of Dec 31, 2019. As of Dec 31, 2020, long-term debt stood at $35,196.8 million, compared with $34,118.1 at the end of Dec 31, 2019.
Zacks Rank & Key Picks
McDonald's, which shares space with Yum China Holdings, Inc. (YUMC - Free Report) , carries a Zacks Rank #3 (Hold).
Yum! Brands have an impressive long-term earnings growth rate of 12.3%.
Jack in the Box fiscal 2021 earnings are expected to witness growth of 20.4%.
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McDonald's (MCD) Q4 Earnings and Revenues Lag Estimates
McDonald's Corporation (MCD - Free Report) reported fourth-quarter 2020 results, wherein earnings and revenues missed the Zacks Consensus Estimate. Notably, the top line missed the consensus mark after beating the same in the preceding four quarters.
Robust drive-thru presence, and investments in delivery and digital over the past few years have aided the company amid the ongoing crisis. Robust digitalization will continue to help the company to drive long-term growth and capture market share.
McDonald's president and CEO Chris Kempczinski said, “2020 will be remembered as one of McDonald's (MCD - Free Report) most challenging, yet inspiring, moments in our long history. The resilience of the McDonald's System was on display – making safety and service a priority, putting our customers and people first, and running great restaurants.”
The company reported adjusted earnings of $1.70 per share, which missed the Zacks Consensus Estimate of $1.75. Moreover, the bottom line declined 14% year over year. Meanwhile, foreign currency translation had a negative impact of 4 cents per share on earnings in the quarter under review.
Revenues & Comps Discussion
In the fourth quarter, revenues of $5,313.8 million missed the Zacks Consensus Estimate of $5,320 million. Moreover, the top line declined 2% year over year. This downtrend was due to the coronavirus pandemic. Moreover, on a constant-currency basis, revenues decreased 3% year over year.
At company-operated restaurants, revenues were $2,233.3 million, down 5% year over year. Moreover, the same at franchise-operated restaurants amounted to $2,985.3 million, flat year over year.
In the quarter, global comps declined 1.3%, against growth of 5.9% in the prior-year quarter. Comps declined for the fourth straight quarter after reporting positive comps in the trailing 19 quarters.
McDonalds Corporation Price, Consensus and EPS Surprise
McDonalds Corporation price-consensus-eps-surprise-chart | McDonalds Corporation Quote
Solid Comps Across Segments
U.S.: Comps at this segment rose 5.5% in the fourth quarter, compared with increase of 5.1% in the prior-year quarter. The company’s comps in the quarter benefited from robust average check growth and strong performance at all major daypart.
International Operated Markets: Comps at this segment declined 7.4% year over year, against a gain of 6.2% in the year-ago quarter. Comps were hurt by dismal comps particularly in France, Spain, Germany and Italy. However, the company witnessed positive comps in Australia and the U.K. during the quarter under review aided by drive-thru performance.
International Developmental Licensed Segment: The segment’s comparable sales decreased 3.6% in the third quarter. In the prior-year quarter, the segment’s comps had risen 6.6%. Comps were negatively impacted by dismal comps in Latin America and Asia, which was marginally offset by robust comps in Japan.
Other Financial Information
The company ended the quarter with cash and cash equivalent of $3,449.1 million, compared with $898.5 million at the end of Dec 31, 2019. As of Dec 31, 2020, long-term debt stood at $35,196.8 million, compared with $34,118.1 at the end of Dec 31, 2019.
Zacks Rank & Key Picks
McDonald's, which shares space with Yum China Holdings, Inc. (YUMC - Free Report) , carries a Zacks Rank #3 (Hold).
Some better-ranked stocks worth considering in the same space include Yum! Brands, Inc. (YUM - Free Report) and Jack in the Box Inc. (JACK - Free Report) . Both the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Yum! Brands have an impressive long-term earnings growth rate of 12.3%.
Jack in the Box fiscal 2021 earnings are expected to witness growth of 20.4%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>