Retail

McDonald’s Results Just Okay

McDonald's Big Mac
courtesy of McDonald's
McDonald’s Corp. (NYSE: MCD) reported fourth-quarter and full-year 2012 results before markets opened this morning. For the quarter, the fast-food restaurant chain posted diluted earnings per share (EPS) of $1.38 on revenues of $6.95 billion. In the same period a year ago, the company reported EPS of $1.33 on revenues of $6.82 billion. Today’s results also compare to the Thomson Reuters consensus estimates for EPS of $1.33 and $6.89 billion in revenues.

For the full year, McDonald’s reported EPS of $5.36 on revenues of $27.57 billion, compared with $5.27 per share on revenues of $27.01 billion a year ago. The consensus estimates called for EPS of $5.31 on $27.5 billion in revenues.

The company’s CEO said:

McDonald’s continued to grow by remaining focused on what matters most to our customers, although our results reflect the impact of the challenging global operating, economic and competitive environment.

U.S. same-store sales rose 0.3% in the quarter and sales in Europe decreased by 0.6%. Asia/Pacific, Middle East, and Africa (APMEA) same-store sales fell by 1.7% in the quarter. These are the metrics that really count, and McDonald’s did not perform well here.

McDonald’s reiterated its annual forecast for global sales growth of 3% to 5%, operating income growth of 6% to 7%, and return on incremental invested capital in the “high teens.” The company plans to spend $3.2 billion in 2013 to open 1,500 to 1,600 new stores and remodel at least another 1,600.

The consensus forecast for the first quarter calls for EPS of $1.26 on revenues of $6.69 billion. The current full-year forecast calls for EPS of $5.78 on revenues of $28.9 billion.

McDonald’s shares are up about 0.7% in premarket trading this morning, at $93.60 in a 52-week range is $83.31 to $102.22. Thomson Reuters had a consensus analyst price target of around $97.40 before today’s report. That target price has dropped by about $3 a share since the end of the third quarter.

 

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