McDonald's Fourth Quarter Earnings: What Analysts Predict and Factors at Play

McDonald's to Announce Fourth-Quarter Earnings

McDonald's is set to announce its fourth-quarter earnings before the market opens on Monday. According to analysts surveyed by LSEG, previously known as Refinitiv, the following are the expected figures:

Earnings per share: $2.82
Revenue: $6.45 billion

The fast-food giant had a strong start to 2023, with a double-digit increase in same-store sales and foot traffic during the first half of the year. However, in the third quarter, McDonald's noted a decline in traffic to its U.S. restaurants as low-income consumers reduced their spending. Analysts anticipate this challenging trend to persist in the fourth quarter, with a projected 4.7% growth in quarterly same-store sales, significantly lower than the 10.9% reported a year earlier.

Challenges and Concerns

The chain's price increases have decelerated, and industry-wide foot traffic saw a decline in November and December. Additionally, CEO Chris Kempczinski has cautioned investors that the Israel-Hamas conflict has negatively impacted sales in the Middle East and certain international markets. A call to boycott McDonald's, initiated by social media users, has further affected the company, following discounts offered to soldiers by its Israeli franchisee. This situation echoes similar challenges faced by Starbucks, which observed reduced U.S. traffic due to boycotts related to the Middle East.

Projections for 2024

For 2024, analysts anticipate McDonald's to achieve earnings of $12.53 per share, marking a 6.1% increase from the previous year, and generate $27.14 billion in revenue, reflecting a 6.3% growth.