McDonald’s fourth-quarter earnings report is eagerly awaited, and the projections are closely scrutinized by financial analysts. The anticipated earnings per share (EPS) stands at $2.82, while the expected revenue is $6.45 billion. The fast-food giant experienced a robust start in 2023, marked by double-digit growth in same-store sales and increased foot traffic during the first half of the year. However, challenges emerged in the third quarter as McDonald’s observed a pronounced pullback in spending by low-income consumers, impacting U.S. restaurant traffic.
Analysts project a more modest 4.7% growth in same-store sales for the fourth quarter, a notable decrease from the impressive 10.9% reported a year earlier. Contributing to this cautious outlook are factors such as a deceleration in the pace of price hikes and an industry-wide decline in foot traffic during the months of November and December.
CEO Chris Kempczinski has alerted investors to the adverse effects of the Israel-Hamas conflict on McDonald’s sales, both in the Middle East and in some markets beyond. The controversy deepened as social media users called for a boycott of McDonald’s after its Israeli franchisee offered discounts to soldiers.
This situation mirrors challenges faced by Starbucks, which also experienced declining U.S. traffic as a result of geopolitical issues.
Looking ahead to 2024, Wall Street forecasts McDonald’s to earn $12.53 per share, reflecting a 6.1% increase from the previous year. Revenue expectations for 2024 are set at $27.14 billion, representing a 6.3% growth. Despite the challenges, McDonald’s stock has shown resilience, rising by 12% over the past year and currently holding a market value of approximately $215 billion. The evolving dynamics and external factors make McDonald’s financial performance a topic of keen interest in the business and investment community.
- Anticipated Earnings and Revenue:
- Analysts are eagerly awaiting McDonald’s fourth-quarter earnings report, expecting an earnings per share (EPS) of $2.82 and revenue of $6.45 billion.
- Challenges in 2023:
- Despite a strong start in 2023, McDonald’s faced challenges in Q3, with a decline in spending by low-income consumers impacting U.S. restaurant traffic.
- Modest Q4 Growth Projection:
- Analysts project a more modest 4.7% growth in same-store sales for Q4, a significant drop from the 10.9% reported a year ago.
- Factors Contributing to Cautious Outlook:
- Slowing down of price hikes and a decline in industry foot traffic in November and December contribute to the cautious outlook.
- CEO’s Warning on Geopolitical Impact:
- CEO Chris Kempczinski warns investors about the impact of the Israel-Hamas conflict on McDonald’s sales, both in the Middle East and some markets outside.
- Social Media Boycott Calls:
- Social media users have called for a boycott of McDonald’s after its Israeli franchisee offered discounts to soldiers, adding to the company’s challenges.
- Similar Challenges Faced by Starbucks:
- Starbucks also faced challenges related to geopolitical issues, with declining U.S. traffic as occasional customers stopped visiting its cafes.
- 2024 Projections:
- For 2024, Wall Street forecasts McDonald’s to earn $12.53 per share, a 6.1% increase from the previous year, and generate $27.14 billion in revenue, reflecting a 6.3% growth.
- Stock Performance:
- Despite challenges, McDonald’s stock has shown resilience, rising by 12% over the past year, giving it a market value of about $215 billion.
- Overall Impact and Interest:
- The evolving dynamics and external factors make McDonald’s financial performance a topic of keen interest in the business and investment community. The company’s ability to navigate challenges and maintain growth will be closely watched in the upcoming earnings report.
