McDonald’s (MCD)is prepared to unleash itssecond-quarter earnings Thursday, a period that should show the benefits of one of the most hotly debated, contentious issues to face the company, its franchisees and its millions and millions of patrons:
Did the double cheeseburger belong on the dollar menu?
Talk about drama. In fact, though, the fast-food giant finally reached a concession with its franchisees that let them take the item off the dollar menu in favor a compromise product – most restaurants offered a double-patty burger sandwich with a single slice of cheese – after several years of quibbling over the issue.
The period also included the rollout of the McCafecoffee beverageoffering, another hotly awaited initiative that could have an impact on its performance. The coffee beverages are expected to offer restaurants a higher-margin product line than the rest of the McDonald’s menu.
McDonald’s is slated to record 97 cents a share on about $5.72 billion of sales in the period, as sales comparisons remained robust in the period. On a global basis, same store sales increased 7% in April and 5% in May. However, the strength in the dollar in the period could prove to be a headwind for the bottom line.
In the first quarter of the year, a number of quick-service restaurant operators posted strong results, as consumers continued to trade down from more-expensive dining options. However, McDonald’s has faced some challenges in key areas such as China, and its shares – after leading the Dow industrial average components last year – have struggled for much of this year.
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