McDonald's Posts Stronger Than Expected Earnings

McDonalds logo - Yellow arc, red font and white backgroundMcDonald's, which had been losing its "mojo" (at least in the eyes of several analysts who cover the company) over the past couple of years, posted better-than-expected quarterly results earlier today thanks, in large part, to the introduction of their all-day breakfast menu.

At the time of the all-day breakfast roll-out, many industry analysts thought that it was the sign of a desperate company. That may or may not have been true, but making the decision to sell McMuffins 24 hours a day has certainly paid off for the McDonald's brand, as revenues and profits both came in higher than expected in the fourth quarter (McDonald's rolled out their all-day breakfast in October). The company posted earnings of $1.31 per share in Q4, compared to analyst estimates of $1.23, while revenues came in at $6.34 billion (higher than the expected $6.22 billion).

McDonald's also unwrapped several other key initiatives during the fourth quarter, including the introduction of higher-quality ingredients and an improved focus on customer service. The initiatives seemed to work, as many analysts are now flocking to upgrade the company's stock.

Most pleasing to analysts has been McDonald's ability to roll out major initiatives in a fairly short period of time, as evidenced by their successful roll-out of their all-day breakfast menu.


McDonald's is also likely benefitting from a couple of other factors, including the recent troubles at Chipotle and the tendency of many American households to still pursue high-value offerings, such as McDonald's new value menu.

Despite the issues that McDonald's has had over the past couple of years, shares of the company are currently sitting right near their all-time highs. Despite operating in a sea of competition, McDonald's continues to pull in tens of millions of Americans per day.

Filed under: General Knowledge

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