McDonald’s (MCD, Financial) reported its second quarter results on Tuesday, July 26. The fast food company reported revenue that was on target with the street’s expectations, however, earnings  missed estimates. Revenue for the quarter was $6.27 billion, which was down 3.5% from the comparable quarter. Earnings per share for the quarter were $1.25, which missed estimates by $0.13. Earnings per share for the quarter decreased 1% from the comparable quarter. In morning trading following the company’s earnings report, the stock is down 4%.
In the second quarter, sales from company operated restaurants accounted for 63% of sales, while franchised restaurant revenue accounted for 37% of revenue. Company operated restaurant revenue was down 8%, while franchised restaurant revenue was down 5%.
Operating profit margins improved in both company operated and franchised restaurants. Company operated restaurants reported a profit margin of 17.1%, while franchised restaurants had a profit margin of 81.7%.
The majority of the firm’s revenue continued to be generated in the U.S., however, revenue from international sales was also high. In the second quarter, 34% of revenue was generated in the U.S., 29% in international lead markets, 25% in high growth areas and 12% in foundational markets and corporate. Comparable store sales in the U.S. missed estimates, which was a concern for investors.
In a CNBC report following the company’s earnings, a market specialist from Morningstar gave insight on the company’s quarterly results.
Disclosure: I do not own any shares of McDonald’s.
