McDonald’s Corporation (NYSE: MCD) is set to release its third-quarter earnings results on Tuesday before the market opens. Despite foreign currency translation, the fast-food chain’s results will be driven by global same-store sales, which is likely to be positive for the seventeenth consecutive quarter.
The average check, traffic, and cash flow per restaurant could be driving the US comps. On the other hand, the international same-store sales will be driven by the market share in France and Germany as well as the average franchisee restaurant cash flow in Russia. It also includes ticket and guest count in the three largest markets – Brazil, China, and Japan.
The top line will be hurt by the impact of strategic refranchising initiative as well as the effect of changes in interest rates and foreign currency fluctuations. However, this could generate more stable and predictable revenue and cash flow in the future. The fast-food restaurant chain has managed to lower expenses on a year-over-year basis over the past six quarters.
As of June 30, 2019, the company has 38,108 restaurants in 120 countries of which 35,461 were licensed to franchisees. McDonald’s believes that ownership of the real estate, combined with the co-investment by franchisees, enables to achieve restaurant performance levels. Franchisees are also responsible for reinvesting capital in their businesses over time.
Read: Walgreens stock heads for cautious stance on future concerns
Analysts expect the company’s earnings to increase by 5.20% to $2.21 per share and revenue will rise by 2.30% to $5.49 billion for the third quarter. The company has surprised investors by beating analysts’ expectations twice in the past four quarters. The majority of the analysts recommended a “buy” rating with an average price target of $232.44.
For the second quarter, McDonald’s reported a 1% rise in earnings helped by a 6.5% growth in comparable-store sales despite flat revenues. The growth in comps reflects solid sales across all segments. In the US, comparable sales increased by 5.7%, helped mainly by the local deal offerings.
Get access to timely and accurate verbatim transcripts that are published within hours of the event.
Most Popular
NFLX Earnings: Netflix Q1 2025 revenue and profit beat estimates
Netflix, Inc. (NASDAQ: NFLX) on Thursday reported stronger-than-expected revenue and earnings for the first quarter of 2025, as its subscriber base continued to expand. Both revenue and the bottom line
Another tough quarter in the cards as Intel prepares for Q1 2025 earnings
Intel Corporation (NASDAQ: INTC) has been facing intense competition from rivals Nvidia in AI chips and AMD in CPUs, lately. The Semiconductor giant issued weak guidance after reporting lower revenues
What to expect when American Airlines (AAL) reports Q1 2025 earnings results
Shares of American Airlines Group (NASDAQ: AAL) stayed red on Thursday. The stock has dropped 48% over the past three months. The airline is slated to report its earnings results
