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McDonald’s is set to release earnings before the bell — here’s what to expect

McDonald's is set to release earnings before the bell — here's what to expect


McDonald’s is set to release earnings before the bell — here’s what to expect


Kiosks for ordering food sit in the dining area of a McDonald’s restaurant located inside the company’s new corporate headquarters on June 4, 2018 in Chicago.

Scott Olson | Getty Images

McDonald’s is reporting first-quarter earnings before the bell Tuesday.

Here’s what Wall Street is expecting, according to a survey of analysts by Refinitiv.

  • Earnings per share: $1.75 expected
  • Revenue: $4.93 billion expected
  • Same-store sales: 3.42%

Wall Street is expecting that McDonald’s first-quarter earnings per share will decline by 2.1% from last year. As foot traffic to stores has fallen, the company has been investing heavily in modernizing its U.S. stores with self-serve kiosks, digital menu boards and other upgrades.

In markets outside the U.S., upgraded stores have shown a lift in sales, but investors will be watching to see if that revenue boost starts to materialize in its home market. The plan to upgrade its stores has led to some tension with U.S. franchisees, who have formed an independent organization called the National Owners Association. In mid-April, the company announced it hired Karen Garcia as its new U.S. vice president of franchise relations.

As part of its strategy to integrate more technology into the business, McDonald’s announced deals with Dynamic Yield and Plexure during the first quarter. The acquisition of Dynamic Yield will help the fast food giant integrate more decision-making tech into its drive-thru menus, with the potential to add it to its app or kiosks down the line. Meanwhile, its minority stake in the mobile app company Plexure will help it engage more with customers via its app, as well as prevent its competitors from benefiting from the company’s innovation.

Another source of tension with franchisees has been McDonald’s move into delivery through a partnership with Uber Eats. The third-party delivery service has been taking a chunk of sales with its commission fees, although Uber said in a filing to go public that it charges its largest chain restaurant partners lower fees. Bloomberg reported that the burger chain is considering ditching its exclusive partnership with Uber Eats and reducing the fees that it forks over to the platform.

McDonald’s has also been moving to simplify its menu by scaling back its late-night offerings and ditching its premium Signature Crafted sandwiches. Both of the changes are intended to help speed up service, while adding more bacon to its menu is expected to get more customers through its doors.

Shares of McDonald’s have risen more than 24% over the last 12 months and are up about 11% since the beginning of the year. The stock’s market value has swelled to $152 billion.

This story is developing. Please check back for updates.


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