McDonald’s Stock Responds as Company Misses Earnings Estimate
McDonald’s Corporation (MCD) posted their 2nd quarterly earnings report for the fiscal 2024 year and yet the company stock jumped 4.13%.
The Zack’s Consensus Estimate anticipated an earnings per share for the stock of $3.08, coming in at $2.97. Revenues for the quarter came up to $6,490 million, just slightly below the estimated $6,551 million.
The company also saw its adjusted earnings fall from last year by 6%, and its top line fell from last year by 0.1%.
Despite all of that, the stock gained 4.13% over the last day, gaining 10.64 points. That brings the McDonald’s stock to $262. The gain today was desperately needed, as this has underperformed this year, starting off at $294 in January. We have seen a gradual decline over the year, though it has not been very steep.
Can McDonald’s Turn It Around?
McDonald’s is looking to drive sales growth in specific areas, particularly in its loyalty program as well as in its chicken menu. The company is focused on offering its customers value in a tight, high inflation market that has seen many major businesses lose customers very quickly post-pandemic.
The company’s CEO points to selective spending among customers as the main reason why their sales are lagging rather than growing. As long as inflation remains high, consumers will be more careful with their dollars, always cognizant that they are not guaranteed to retain value on their assets.
Sales at company-owned restaurants for the year dropped 1% but still raked in $2.46 billion from this time last year. The franchise operations pulled in $3.94 billion, however, which is a 0.2% gain from the previous year.
A lot of MCD’s value as a stock will rely on inflation factors. If those ease up and inflation improves, the company may not have to try as hard to bring in customers. Watch the Federal Reserve statement today to see when interest rate cuts might hit and to see the effect that inflation is having on that key decision.
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