Will McDonald's Have a Stale Finish to 2013?
Fast-food giant McDonald's reports fourth quarter and full-year results on Thursday. The company hit its stride during the recession but has since hit some bumps in the road amid increasing competition from Wendy's , Burger King , and Yum! Brands Will McDonald's continue to slip in this week's earnings report?
McDonald's has nearly 35,000 locations in 119 countries. Over 80% of the locations are franchise-owned. The company's the largest global fast-food chain and that size offers a great deal of leverage when it comes to supply negotiations. While McDonald's doesn't have explosive growth ahead, the company can continue to move forward with new products and the geographic expansion of existing products. The increasingly popular McCafe products exemplify this potential.
Even with all of this potential, McDonald's had a rough 2013 and that could continue in the fourth-quarter report. Here's what to look for in the earnings release.
Quarterly estimates -- and results -- to beat
Analysts estimate McDonald's will report fourth-quarter revenue of $7.1 billion and earnings per share of $1.39, and full-year revenue of $28.1 billion with EPS of $5.56. McDonald's has met or beat quarterly revenue estimates for the past five quarters but it missed on EPS in two of those quarters.
McDonald's fourth-quarter report last year beat analyst estimates with revenue of $7 billion and EPS of $1.38. The full-year results included revenue of $27.6 billion and EPS of $5.36. Global comparable-store sales were up 0.1% for the quarter and 3.1% for the year.
Watch the comps
McDonald's was one of the rare winners during the recession because of the low prices of its menu items in comparison to those of other fast-food establishments such as Wendy's, which saw a steep customer drop-off at around the same time. However, the improving economy brought out more competition and McDonald's comparable-store sales began to suffer.
The article Will McDonald's Have a Stale Finish to 2013? originally appeared on Fool.com.Brandy Betz has no position in any stocks mentioned. The Motley Fool recommends Burger King Worldwide and McDonald's. The Motley Fool owns shares of McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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