We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
McDonald's (MCD) Q2 Earnings Beat Estimates, Revenues Lag
Read MoreHide Full Article
McDonald's Corporation (MCD - Free Report) reported mixed second-quarter 2022 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top line fell year over year, while the bottom line increased on a year-over-year basis. MCD’s performance during the quarter was affected by restaurant closures in Russia and Ukraine coupled with inflationary pressures on labor and commodities.
Earnings & Revenue Discussion
During second-quarter 2022, McDonald's reported adjusted earnings per share (EPS) of $2.55, surpassing the Zacks Consensus Estimate of $2.45 by 4.1%. In the prior-year quarter, MCD had reported an adjusted EPS of $2.37.
Quarterly net revenues of $5,718.4 million missed the consensus mark of $5,860 million by 2.4%. The top line dipped 3% year over year.
McDonald's Corporation Price, Consensus and EPS Surprise
At company-operated restaurants, sales were $2,112.8 million, down 15% year over year. The same at franchise-operated restaurants was $3,526.8 million, up 7% year over year.
Comps Details
For the quarter under discussion, global comps advanced 9.7%, while a gain of 40.5% was reported in the prior-year quarter. This marks the sixth consecutive quarter of comps growth.
Strong Comps Across Segments
U.S.: During the second quarter, comps at this segment rose 3.7%, while a gain of 25.9% was reported in the prior-year period. McDonald’s’ comps for the quarter benefited from a menu price increase, robust digitalization and value offerings across its everyday menu.
International Operated Markets: Comps at this segment increased 13% year over year compared with a gain of 75.1% reported in the year-ago quarter. MCD gained from strong comparable sales in France and Germany.
International Developmental Licensed Segment: During the quarter, the segment’s comparable sales increased 16% year over year. In the prior-year quarter, its comps increased 32.3%. McDonald's gained from robust performance in Japan and Brazil. However, this was partially offset by negative comps in China due to COVID-19 resurgences and related government restrictions.
Operating Highlights & Expenses
During the second quarter, McDonald’s total operating costs and expenses came in at $4,006.6 million, up 25% from the prior-year quarter’s levels.
During the quarter, operating income decreased 36% year over year to $1,711.8 million.
Net income during the quarter totaled $1,188 million, down 46% from $2,219.3 million reported in the year-ago quarter.
Dollar Tree sports a Zacks Rank #1, currently. DLTR has a trailing four-quarter earnings surprise of 13.1%, on average. The stock has gained 67.4% in the past year.
The Zacks Consensus Estimate for Dollar Tree’s 2022 sales and EPS suggests growth of 6.7% and 40.5%, respectively, from the corresponding year-ago period’s levels.
Designer Brands flaunts a Zacks Rank of 1 at present. DBI has a trailing four-quarter earnings surprise of 102.5%, on average. Shares of DBI have increased 2.5% in the past year.
The Zacks Consensus Estimate for Designer Brands’ 2023 sales and EPS suggests growth of 6.9% and 16.5%, respectively, from the comparable year-ago period’s levels.
Potbelly is currently Zacks #1 Ranked. PBPB has a trailing four-quarter earnings surprise of 26.2%, on average. Shares of PBPB have declined 21.2% in the past year.
The Zacks Consensus Estimate for Potbelly’s 2022 sales and EPS suggests growth of 14.6% and 94.2%, respectively, from the corresponding year-ago period’s levels.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
McDonald's (MCD) Q2 Earnings Beat Estimates, Revenues Lag
McDonald's Corporation (MCD - Free Report) reported mixed second-quarter 2022 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top line fell year over year, while the bottom line increased on a year-over-year basis. MCD’s performance during the quarter was affected by restaurant closures in Russia and Ukraine coupled with inflationary pressures on labor and commodities.
Earnings & Revenue Discussion
During second-quarter 2022, McDonald's reported adjusted earnings per share (EPS) of $2.55, surpassing the Zacks Consensus Estimate of $2.45 by 4.1%. In the prior-year quarter, MCD had reported an adjusted EPS of $2.37.
Quarterly net revenues of $5,718.4 million missed the consensus mark of $5,860 million by 2.4%. The top line dipped 3% year over year.
McDonald's Corporation Price, Consensus and EPS Surprise
McDonald's Corporation price-consensus-eps-surprise-chart | McDonald's Corporation Quote
At company-operated restaurants, sales were $2,112.8 million, down 15% year over year. The same at franchise-operated restaurants was $3,526.8 million, up 7% year over year.
Comps Details
For the quarter under discussion, global comps advanced 9.7%, while a gain of 40.5% was reported in the prior-year quarter. This marks the sixth consecutive quarter of comps growth.
Strong Comps Across Segments
U.S.: During the second quarter, comps at this segment rose 3.7%, while a gain of 25.9% was reported in the prior-year period. McDonald’s’ comps for the quarter benefited from a menu price increase, robust digitalization and value offerings across its everyday menu.
International Operated Markets: Comps at this segment increased 13% year over year compared with a gain of 75.1% reported in the year-ago quarter. MCD gained from strong comparable sales in France and Germany.
International Developmental Licensed Segment: During the quarter, the segment’s comparable sales increased 16% year over year. In the prior-year quarter, its comps increased 32.3%. McDonald's gained from robust performance in Japan and Brazil. However, this was partially offset by negative comps in China due to COVID-19 resurgences and related government restrictions.
Operating Highlights & Expenses
During the second quarter, McDonald’s total operating costs and expenses came in at $4,006.6 million, up 25% from the prior-year quarter’s levels.
During the quarter, operating income decreased 36% year over year to $1,711.8 million.
Net income during the quarter totaled $1,188 million, down 46% from $2,219.3 million reported in the year-ago quarter.
Zacks Rank & Key Picks
McDonald's currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the Zacks Retail-Wholesale sector are Dollar Tree Inc. (DLTR - Free Report) , Designer Brands Inc. (DBI - Free Report) and Potbelly Corporation (PBPB - Free Report) .
Dollar Tree sports a Zacks Rank #1, currently. DLTR has a trailing four-quarter earnings surprise of 13.1%, on average. The stock has gained 67.4% in the past year.
The Zacks Consensus Estimate for Dollar Tree’s 2022 sales and EPS suggests growth of 6.7% and 40.5%, respectively, from the corresponding year-ago period’s levels.
Designer Brands flaunts a Zacks Rank of 1 at present. DBI has a trailing four-quarter earnings surprise of 102.5%, on average. Shares of DBI have increased 2.5% in the past year.
The Zacks Consensus Estimate for Designer Brands’ 2023 sales and EPS suggests growth of 6.9% and 16.5%, respectively, from the comparable year-ago period’s levels.
Potbelly is currently Zacks #1 Ranked. PBPB has a trailing four-quarter earnings surprise of 26.2%, on average. Shares of PBPB have declined 21.2% in the past year.
The Zacks Consensus Estimate for Potbelly’s 2022 sales and EPS suggests growth of 14.6% and 94.2%, respectively, from the corresponding year-ago period’s levels.