McDonald's Global Sales Outperform, But U.S. Weakness Weighs on Q4 Results

GuruFocus.com
02-10

McDonald's (NYSE:MCD) reported mixed fourth-quarter results, with global comparable sales surpassing expectations despite a decline in U.S. sales.

The fast food giant posted a 0.4% increase in global comparable sales, beating analyst expectations of a 0.93% decline. However, U.S. comparable sales dropped 1.4%, falling short of the -0.41% consensus, as lower average checks offset a slight rise in guest counts.

  • Warning! GuruFocus has detected 4 Warning Sign with MCD.

Internationally, the International Operated Markets segment saw a 0.1% sales rise, outperforming the expected 1.14% decline, while the International Developmental Licensed Markets segment delivered a 4.1% gain, exceeding the -0.38% consensus.

McDonald's reported Q4 net income of $2.02 billion, or $2.80 per share, nearly unchanged from the prior year. On an adjusted basis, earnings came in at $2.83 per share, missing estimates by a cent. Revenue fell 0.3% to $6.39 billion, below the $6.45 billion forecast.

Looking ahead, McDonald's projects a 2025 operating margin in the mid-to-high 40% range and expects interest expenses to rise 4% to 6% due to higher debt levels and interest rates. The company plans to spend $3 billion to $3.2 billion on expansion, adding about 2,200 new locations globally, including 600 in the U.S. Net restaurant additions are expected to reach 1,800.

Shares of McDonald's (NYSE:MCD) edged higher in premarket trading, within its 52-week range of $243.53 to $317.90.

This article first appeared on GuruFocus.

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