In the third quarter, McDonald’s revenue dropped 10% to $5.6 billion, but most of this had to do with its program to refranchise some of its operations. Operating income rose 44% to $3.1 billion. The most impressive improvement was in same-store sales. Global comparable store sales rose 6%. U.S. sales rose 4.1%. Food sales were the primary driver. At that time, McDonald’s management pointed out:
In the U.S., third quarter comparable sales increased 4.1%, reflecting the national beverage and McPick 2 value promotions, along with the continued success of the Signature Crafted premium sandwich platform. Operating income for the quarter increased 6%, reflecting higher sales-driven franchised margin dollars and G&A savings.
McDonald’s also announced earlier this month that by 2025 all the company’s guest packaging will be made from renewable, recycled or certified sources. Perhaps more ambitiously, the company set a goal to recycle at every McDonald’s store around the globe.
To reach its goals, the company said it will consult with industry experts, local governments and environmental associations to improve McDonald’s packaging and recycling practices. The company expects its efforts to drive smarter packaging designs, to implement new recycling programs, to establish new measurement programs and to educate staff and customers.
So far in 2017, McDonald’s is lagging the broad markets, with its stock up just over 3% year to date. Over the past 52 weeks, the stock is actually up over 46%.
A few analysts weighed in on McDonald’s ahead of the earnings report:
- Nomura has a Buy rating with a $198 price target.
- Credit Suisse has an Outperform rating and a $191 target.
- Goldman Sachs has a Buy rating with a $200 price target.
- Barclays has an Overweight rating with a $205 price target.
- JPMorgan has a Buy rating and a $186 price target.
Shares of McDonald’s traded at $177.85 on Monday, with a consensus analyst price target of $186.57 and a 52-week range of $121.70 to $178.40.
Cash Back Credit Cards Have Never Been This Good
Credit card companies are at war, handing out free rewards and benefits to win the best customers. A good cash back card can be worth thousands of dollars a year in free money, not to mention other perks like travel, insurance, and access to fancy lounges. See our top picks for the best credit cards today. You won’t want to miss some of these offers.
Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
