McDonalds Slips on Revenue Miss
McDonald’s (NYSE:MCD) reported quarterly revenue that missed analysts’ estimates on Monday morning. As a result, shares of the company traded lower in early session trading. The company reported global comparable sales for October are expected to be relatively flat, due to a number of headwinds. Sales at stores opened for at least 12 months rose 0.9 percent in the third quarter, these results missed analysts’ expectations of a 1 percent increase. In the United States, comparable sales increased 0.7 percent, but missed the average 0.9 percent rise analysts had expected. Comparable sales in its Asia/Pacific, Middle East and Africa business declined by a drastic 1.4 percent.
The world’s largest restaurant chain by revenue announced its net income rose to $1.52 billion, or $1.52 per share, for the third quarter ended September 30. To compare these results on a year over year basis we see some improvement. The company reported $1.46 billion, or $1.43 per share, a year earlier. On the top line, McDonalds reported revenue rose 2.4 percent to $7.32 billion. These results came in largely in line, however, as previously mentioned there was a slightly miss on the top line. Analysts on average had expected earnings of $1.51 per share on revenue of $7.34 billion, according to Thomson Reuters. Restaurant margins at both franchised and company-operated stores slipped in the quarter.
Going forward, analysts will be looking to see in the company can improve its comparable data in its emerging market segments. Health concerns and decreasing wage growth in a number of key markets have held the company back as of late. At the time of this writing, shares of the company were to the downside by 0.66 percent to $94.55 per share. It seems likely we will see a number of analyst upgrades and or downgrades in the coming days. Until then, it is suggested most investors just watch closely as the stock market may remain volatile.
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