McDonald's Corporation MCD reported fourth-quarter 2024 results, wherein earnings were in line with the Zacks Consensus Estimate but revenues missed the same. Both top and bottom lines decreased year over year.

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Despite reporting mixed results, the company’s shares are up nearly 3% in pre-market trading session as investor sentiment received a boost after its fourth-quarter 2024 international sales increased year over year.

McDonald's chairman and CEO Chris Kempczinski emphasized that its Accelerating-the-Arches strategy remains the right approach for expanding market share. He highlighted McDonald's commitment to winning by prioritizing customers through strong value offerings, innovative menu additions and culturally relevant marketing.

MCD’s Earnings & Revenue Discussion

In fourth-quarter 2024, McDonald's reported adjusted earnings per share (EPS) of $2.83, which was in line with the Zacks Consensus Estimate.  Adjusted earnings rose 4% year over year.

McDonald's Corporation Price and EPS Surprise

McDonald's Corporation price-eps-surprise | McDonald's Corporation Quote

Quarterly net revenues of $6,388 million missed the consensus mark of $6,477 million. Additionally, the top line decreased 0.3% year over year.

At company-operated restaurants, sales were $2.31 billion, down 7% year over year. Sales at franchise-operated restaurants amounted to $3.95 billion, which increased 2% year over year. Other revenues rose 88% year over year to $120 million. Our model predicted sales by company-operated and franchise-operated restaurants to rise 4% and 0.9%, respectively, from the prior-year levels.

McDonald's Comps Details

In the quarter under discussion, global comps increased 0.4% compared with 3.4% growth in the prior-year quarter. Our estimate was a 1.6% decline year over year. The company’s comps increased after witnessing a decline in the preceding two quarters.

Comps Across MCD’s Segments

United States.: In the fourth quarter, segmental comps declined 1.4% against 4.3% growth registered in the prior-year quarter. The company's comparable sales for the quarter were impacted by a decline in average checks, though this was partially offset by a slight increase in comparable guest counts. Our model estimated the U.S. comps to be flat.

International Operated Markets: Segmental comps increased 0.1% compared with 4.4% growth in the year-ago quarter. The segment's modest growth was caused by mixed performance across markets. While most markets reported positive comparable sales, the overall results were partially offset by declines in certain regions, with the United Kingdom leading the downturn. We anticipated a decrease of 2.7% from the year-ago levels.

International Developmental Licensed Segment: Segmental comparable sales registered a 4.1% increase compared with 0.7% growth in the prior-year quarter. The segment's performance was driven by positive comparable sales, with the Middle East and Japan leading the growth.

Operating Highlights & Expenses of McDonald's

In the fourth quarter, McDonald’s total operating costs and expenses were $3.51 billion, down 2% year over year.

Operating income rose 2% year over year to $2.86 billion. Net income totaled $2.02 billion, down 1% year over year.

MCD’s Zacks Rank & Key Picks

MCD currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the Zacks Retail – Restaurants industry are:

Brinker International, Inc. EAT presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

EAT delivered a trailing four-quarter earnings surprise of 24.7%, on average. The stock has surged 304.7% in the past year. The consensus estimate for EAT’s fiscal 2025 sales and EPS indicates growth of 17.2% and 92.9%, respectively, from the year-ago period’s levels.

Kura Sushi USA, Inc. KRUS currently sports a Zacks Rank of 1. KRUS delivered a trailing four-quarter negative earnings surprise of 70.8%, on average. The stock has lost 31.8% in the past year.

The Zacks Consensus Estimate for KRUS’ 2025 sales and EPS indicates a rise of 18.3% and 237.5%, respectively, from the year-ago period’s levels.

Potbelly Corporation PBPB currently carries a Zacks Rank #2 (Buy). PBPB delivered a trailing four-quarter earnings surprise of 67.5%, on average. The stock has gained 74.8% in the past six months.

The consensus estimate for PBPB’s 2025 sales and EPS indicates growth of 4.3% and 12.5%, respectively, from the year-ago period’s levels.

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