McDonald’s MCD released its fourth-quarter earnings on Jan. 29 before the opening bell. The company posted strong earnings and revenue for the quarter, meeting Wall Street’s estimates.
By the numbers
The fast food chain registered fourth-quarter adjusted earnings of $1.97 per share. Revenue stood at $5.35 billion , which reflected a gain of 3.7% year-over-year. Analysts had predicted earnings of $1.96 per share on $5.3 billion in revenue.
Global comps in the reported quarter surged 5.9%, which surpassed Wall Street’s growth estimate of 5.2%. The company attributed robust global comps to strong comps across all its segments.
Segment performance
In the U.S., same-store sales climbed 5.1% during the quarter courtesy of a rise in prices, robust sales of core menu items and increased countrywide and local deal offerings. Additionally, the company beneffited from the high-tech store modernizations, which include self-order kiosks.
Comps in the international operated division rose 6.2% in the quarter, driven by strong sales performance in France and Germany. In the international developmental licensed segment, comps increased 7.2% compared with the prior quarter’s comps growth of 8.1%.
Efforts to attract customers
McDonald’s has been up against fast food chains who are offering combo deals to combat the two for $5 offering by McDonald’s. Wendy’s WEN is looking forward to roll out breakfast countrywide this year, which will definitely impact the company’s morning business.
McDonald’s is expanding its breakfast menu by including two chicken sandwiches. Additionally, the company is experimenting with a southern style chicken sandwich to contest Chick-fil-A and Restaurant Brands International (QSR).
Guidance
The fast food giant has provided guidance for 2020, predicting earnings per share to grow in the high-single digits range. Worldwide sales growth is projected to be between 3% and 5%.
The company said it would add 1000 net new restaurants globally. Capital expenditure is anticipated to be approximately $2.4 billion.
Disclosure: I do not hold any positions in the stocks mentioned.
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