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McDonald’s stock jumps on results, plan

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McDonald’s stock jumps on results, plan

McDonald’s new CEO shocked analysts and investors on Wednesday by announcing that he would reveal the first steps of a turnaround plan for the struggling fast-food chain in just 10 days. That’s the key reason that McDonald’s stock was up more than 2% Wednesday afternoon, as CEO Steve Easterbrook — in office for only seven weeks — told analysts that change was urgent — and imminent.McDonalds

For McDonald’s, a turnaround couldn’t come soon enough. For nearly two years, the chain has seen its stock decline even as its same-store sales, particularly in the U.S. market, have been falling. The company has been playing catch-up to much of the fast-food industry, trying to improve the quality of its food and mend its tattered brand image. Industry analysts say that change is way, overdue — particularly in the quality of McDonald’s menu offerings. The world’s biggest fast-food company said it had a profit of 84 cents per share. Earnings were $1.10 per share, adjusted for non-recurring costs. That beat Wall Street expectations, which were $1.05 per share.

Meanwhile, revenue for the quarter was $5.96 billion — which fell short of Wall Street expectations, at $6.02 billion. The company also said that it will close 350 additional under-performing restaurants — primarily in the U.S., Japan and China. This is in addition to the 350 global restaurant closings originally planned for 2015, previously announced in January. In the U.S., first quarter comparable sales decreased 2.6% reflecting negative sales and guest traffic as the segment’s product and promotional offers did not overcome the competitive activity. U.S. operating income for the quarter declined 11%, reflecting weak sales results and the impact of restructuring and restaurant closing charges.


February 2018
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