What Happened?

Shares of fast-food chain McDonald’s (NYSE:MCD) jumped 5.1% in the morning session after the company recorded strong fourth-quarter results that exceeded analysts' same-store sales expectations. A key takeaway is that McDonald's is seeing strong loyalty program engagement, with systemwide sales to loyalty members reaching approximately $8 billion in the quarter, a 30% increase year/year. Strength in international markets helped offset a slight decline in U.S. sales growth, and management anticipates a rebound later in the year. Overall, this was a decent quarter for the company.

After the initial pop the shares cooled down to $305.43, up 3.8% from previous close.

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What The Market Is Telling Us

McDonald’s shares are not very volatile and have only had 1 move greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business. 

The biggest move we wrote about over the last year was 4 months ago when the stock dropped 8.4% on the news that the company is being investigated following an E. coli outbreak in some US stores. McDonald's noted that it had halted distribution of the onions linked to the outbreak and removed the affected item from menus in the affected states. The stock's reaction suggests markets might be struggling to understand how much the outbreak might impact the business.

McDonald's is up 4.4% since the beginning of the year, and at $305.43 per share, it is trading close to its 52-week high of $316.56 from October 2024. Investors who bought $1,000 worth of McDonald’s shares 5 years ago would now be looking at an investment worth $1,433.

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