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Factors Setting the Tone for McDonald's (MCD) Q2 Earnings
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McDonald's Corporation (MCD - Free Report) is scheduled to report second-quarter 2020 results on Jul 28, before the opening bell. In the last-reported quarter, the company delivered a negative earnings surprise of 7.6%.
Q2 Estimates
The Zacks Consensus Estimate for second-quarter earnings is pegged at 76 cents per share, indicating a decline from earnings of $2.05 reported in the year-ago quarter. For revenues, the consensus mark stands at $3,698 million, suggesting a decrease of 31.6% from the year-ago figure.
The coronavirus pandemic is expected to have materially affected McDonald's second-quarter performance. In the last month, the company provided an update on financial performance in the light of the COVID-19 pandemic. In the month of April, comparable sales in the U.S. and International Operated Markets were down 19.2% and 66.7%, respectively. However, for the month ended May 31, the metric declined only 5.1% and 40.5% at U.S and International Operated Markets, respectively. Total comparable sales improved from a slump of 39% (for the month ended Apr 30) to a decline of 20.9% (for the month ended May 31).
Notably, decline in store traffic and high costs associated with brand positioning and labor might get reflected in the second-quarter results. Moreover, decline in franchise revenues is likely to have affected performance in the quarter to be reported. Notably, the Zacks Consensus Estimate for revenues at franchise-operated restaurants stands at $2,032 million, indicating a decline of 30.9% from the prior-year quarter.
Nonetheless, initiatives like digital enhancement, menu innovation and improvement in delivery services may have contributed to the second-quarter performance. To provide enhanced convenience to customers, McDonald’s has been increasingly focusing on delivery. The company provides delivery from more than 25,000 restaurants in above 75 countries.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for McDonald's this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other stocks from the Restaurant space that investors may consider as our model shows that these too have the right combination of elements to post an earnings beat in the upcoming releases:
Papa John's International, Inc. (PZZA - Free Report) has a Zacks Rank #1 and an Earnings ESP of +7.56%.
The Cheesecake Factory Incorporated (CAKE - Free Report) currently has a Zacks Rank #3 and an Earnings ESP of +30.07%.
Brinker International, Inc. (EAT - Free Report) has a Zacks Rank #3 and an Earnings ESP of +19.81%.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
Image: Bigstock
Factors Setting the Tone for McDonald's (MCD) Q2 Earnings
McDonald's Corporation (MCD - Free Report) is scheduled to report second-quarter 2020 results on Jul 28, before the opening bell. In the last-reported quarter, the company delivered a negative earnings surprise of 7.6%.
Q2 Estimates
The Zacks Consensus Estimate for second-quarter earnings is pegged at 76 cents per share, indicating a decline from earnings of $2.05 reported in the year-ago quarter. For revenues, the consensus mark stands at $3,698 million, suggesting a decrease of 31.6% from the year-ago figure.
McDonalds Corporation Price and EPS Surprise
McDonalds Corporation price-eps-surprise | McDonalds Corporation Quote
Factors to Note
The coronavirus pandemic is expected to have materially affected McDonald's second-quarter performance. In the last month, the company provided an update on financial performance in the light of the COVID-19 pandemic. In the month of April, comparable sales in the U.S. and International Operated Markets were down 19.2% and 66.7%, respectively. However, for the month ended May 31, the metric declined only 5.1% and 40.5% at U.S and International Operated Markets, respectively. Total comparable sales improved from a slump of 39% (for the month ended Apr 30) to a decline of 20.9% (for the month ended May 31).
Notably, decline in store traffic and high costs associated with brand positioning and labor might get reflected in the second-quarter results. Moreover, decline in franchise revenues is likely to have affected performance in the quarter to be reported. Notably, the Zacks Consensus Estimate for revenues at franchise-operated restaurants stands at $2,032 million, indicating a decline of 30.9% from the prior-year quarter.
Nonetheless, initiatives like digital enhancement, menu innovation and improvement in delivery services may have contributed to the second-quarter performance. To provide enhanced convenience to customers, McDonald’s has been increasingly focusing on delivery. The company provides delivery from more than 25,000 restaurants in above 75 countries.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for McDonald's this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
McDonald's has an Earnings ESP of +3.46% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks With Favorable Combination
Here are some other stocks from the Restaurant space that investors may consider as our model shows that these too have the right combination of elements to post an earnings beat in the upcoming releases:
Papa John's International, Inc. (PZZA - Free Report) has a Zacks Rank #1 and an Earnings ESP of +7.56%.
The Cheesecake Factory Incorporated (CAKE - Free Report) currently has a Zacks Rank #3 and an Earnings ESP of +30.07%.
Brinker International, Inc. (EAT - Free Report) has a Zacks Rank #3 and an Earnings ESP of +19.81%.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
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