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McDonald (MCD) Q1 Earnings Miss, Revenues Top Estimates
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McDonald's Corporation (MCD - Free Report) posted first-quarter 2024 results, wherein earnings missed the Zacks Consensus Estimate but revenues beat the same. The top and bottom lines increased on a year-over-year basis.
Chris Kempczinski, president and CEO of McDonald's, said that as consumers increasingly scrutinize every dollar they spend, the company’s commitment is to consistently earn their patronage by providing top-notch dependable value and exceptional service. Looking ahead to the remainder of 2024 and beyond, MCD’s focus remains on maximizing the competitive strengths outlined in its Accelerating the Arches strategy and expanding its market share in the quick-service restaurant sector to fuel sustained growth.
Earnings & Revenue Discussion
During first-quarter 2024, McDonald's reported adjusted earnings per share (EPS) of $2.70, which missed the Zacks Consensus Estimate of $2.71. However, adjusted earnings increased 2% year over year.
Quarterly net revenues of $6,169 million beat the consensus mark of $6,168 million. The top line rose 5% year over year.
At company-operated restaurants, sales totaled $2.35 billion, up 6% year over year. Sales at franchise-operated restaurants amounted to $3.72 billion and increased 4% year over year. Other revenues rose 6% year over year to $91 million. Our model predicted sales in company-operated and franchise-operated restaurants to rise 10% and 1.4%, respectively, from the prior-year levels.
Comps Details
In the quarter under discussion, global comps expanded 1.9% compared with 12.6% in the prior-year quarter. Our estimate for the same was pinned at 4.2%. The company’s comps increased for the 13th quarter in a row.
U.S.: During the first quarter, segmental comps rose 2.5% compared with 12.6% a year ago. Comparable sales saw a boost due to increased average checks resulting from strategic menu price adjustments. Strong execution at the restaurant level, impactful marketing initiatives highlighting the core menu offerings, and ongoing growth in digital and delivery services played a role in driving strong comparable sales. Our model estimated U.S. comps to climb 3.9%.
International Operated Markets: Segmental comps increased 2.7% compared with 12.6% in the year-ago quarter. Strong comparable sales in Germany and the U.K. resulted in the uptick. We anticipated a rise of 4.2% from the year-ago levels.
International Developmental Licensed Segment: Segmental comparable sales registered a 0.2% decline against 12.6% growth in the prior-year quarter. Despite positive comparable sales in Japan, Latin America and Europe, the ongoing effects of the Middle East conflict outweighed the gains.
Operating Highlights & Expenses
During the first quarter, McDonald’s total operating costs and expenses were $3.43 billion, up 2% year over year.
Operating income rose 8% year over year to $2.73 billion. Net income totaled $1.92 billion, up 7% year over year.
The Zacks Consensus Estimate for DIN’s 2025 sales and EPS indicates a rise of 1.7% and 4.7%, respectively, from the year-ago period’s levels.
Wingstop Inc. (WING - Free Report) carries a Zacks Rank #2 at present. WING has a trailing four-quarter earnings surprise of 21.3%, on average. The stock has risen 49.1% year to date.
The Zacks Consensus Estimate for WING’s 2025 sales and EPS implies growth of 15.9% and 21.8%, respectively, from the year-ago period’s levels.
Yum China Holdings, Inc. (YUMC - Free Report) carries a Zacks Rank #2 at present. The company has a trailing four-quarter earnings surprise of 40.7%, on average. Shares of YUMC fell 6.5% year to date.
The Zacks Consensus Estimate for YUMC’s 2025 sales and EPS suggests growth of 11% and 16.2%, respectively, from the year-ago period’s levels.
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McDonald (MCD) Q1 Earnings Miss, Revenues Top Estimates
McDonald's Corporation (MCD - Free Report) posted first-quarter 2024 results, wherein earnings missed the Zacks Consensus Estimate but revenues beat the same. The top and bottom lines increased on a year-over-year basis.
Chris Kempczinski, president and CEO of McDonald's, said that as consumers increasingly scrutinize every dollar they spend, the company’s commitment is to consistently earn their patronage by providing top-notch dependable value and exceptional service. Looking ahead to the remainder of 2024 and beyond, MCD’s focus remains on maximizing the competitive strengths outlined in its Accelerating the Arches strategy and expanding its market share in the quick-service restaurant sector to fuel sustained growth.
Earnings & Revenue Discussion
During first-quarter 2024, McDonald's reported adjusted earnings per share (EPS) of $2.70, which missed the Zacks Consensus Estimate of $2.71. However, adjusted earnings increased 2% year over year.
Quarterly net revenues of $6,169 million beat the consensus mark of $6,168 million. The top line rose 5% year over year.
At company-operated restaurants, sales totaled $2.35 billion, up 6% year over year. Sales at franchise-operated restaurants amounted to $3.72 billion and increased 4% year over year. Other revenues rose 6% year over year to $91 million. Our model predicted sales in company-operated and franchise-operated restaurants to rise 10% and 1.4%, respectively, from the prior-year levels.
Comps Details
In the quarter under discussion, global comps expanded 1.9% compared with 12.6% in the prior-year quarter. Our estimate for the same was pinned at 4.2%. The company’s comps increased for the 13th quarter in a row.
McDonald's Corporation Price and EPS Surprise
McDonald's Corporation price-eps-surprise | McDonald's Corporation Quote
Strong Comps Across Segments
U.S.: During the first quarter, segmental comps rose 2.5% compared with 12.6% a year ago. Comparable sales saw a boost due to increased average checks resulting from strategic menu price adjustments. Strong execution at the restaurant level, impactful marketing initiatives highlighting the core menu offerings, and ongoing growth in digital and delivery services played a role in driving strong comparable sales. Our model estimated U.S. comps to climb 3.9%.
International Operated Markets: Segmental comps increased 2.7% compared with 12.6% in the year-ago quarter. Strong comparable sales in Germany and the U.K. resulted in the uptick. We anticipated a rise of 4.2% from the year-ago levels.
International Developmental Licensed Segment: Segmental comparable sales registered a 0.2% decline against 12.6% growth in the prior-year quarter. Despite positive comparable sales in Japan, Latin America and Europe, the ongoing effects of the Middle East conflict outweighed the gains.
Operating Highlights & Expenses
During the first quarter, McDonald’s total operating costs and expenses were $3.43 billion, up 2% year over year.
Operating income rose 8% year over year to $2.73 billion. Net income totaled $1.92 billion, up 7% year over year.
Zacks Rank & Key Picks
MCD currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail – Restaurants industry are:
Dine Brands Global, Inc. (DIN - Free Report) carries a Zacks Rank #2 (Buy) at present. DIN has a trailing four-quarter earnings surprise of 17.6%, on average. DIN’s shares have lost 9% year to date. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for DIN’s 2025 sales and EPS indicates a rise of 1.7% and 4.7%, respectively, from the year-ago period’s levels.
Wingstop Inc. (WING - Free Report) carries a Zacks Rank #2 at present. WING has a trailing four-quarter earnings surprise of 21.3%, on average. The stock has risen 49.1% year to date.
The Zacks Consensus Estimate for WING’s 2025 sales and EPS implies growth of 15.9% and 21.8%, respectively, from the year-ago period’s levels.
Yum China Holdings, Inc. (YUMC - Free Report) carries a Zacks Rank #2 at present. The company has a trailing four-quarter earnings surprise of 40.7%, on average. Shares of YUMC fell 6.5% year to date.
The Zacks Consensus Estimate for YUMC’s 2025 sales and EPS suggests growth of 11% and 16.2%, respectively, from the year-ago period’s levels.