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McDonald's (MCD) to Report Q1 Earnings: What's in Store?
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McDonald's Corporation (MCD - Free Report) is scheduled to report first-quarter 2023 results on Apr 25, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 5.3%.
How are Estimates Placed?
The Zacks Consensus Estimate for first-quarter earnings is pegged at $2.30 per share, indicating growth of 0.9% from $2.28 reported in the year-ago quarter. For revenues, the consensus mark is pegged at $5,566 million. The metric suggests a deterioration of 1.8% from the year-ago quarter’s figure.
Let's take a look at how things have shaped up in the quarter under review.
Factors at Play
McDonald's revenues are likely to have been negatively impacted by dismal international operated markets revenues. Although, MCD’s performance in China is likely to have improved sequentially, softening economy and COVID-19-related government restrictions continue to hurt the company. Our model predicts international operated markets revenues to decline 15.9% year over year to $1,245.6 million.
However, robust digitalization, menu innovation, expansion efforts and strong comps are likely to have aided the company’s U.S. segment’s performance. We expect total U.S. segment revenues in first-quarter 2023 to be up 4.2%, year over year. Per our model, U.S comps are to improve 1.1% driven by increases in average check growth and menu price.
On the flip side, high inflationary pressure is likely to have hurt margins in the quarter. Significant levels of food and energy inflation in Europe may have been affected. The company expects to witness food and paper inflation in 2023 between mid-to-high single digits.
Our proven model conclusively 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 Zacks Retail - Restaurants industry that investors may consider as our model shows that these too have the right combination of elements to post an earnings beat in the quarter to be reported.
Chipotle Mexican Grill, Inc. (CMG - Free Report) currently has an Earnings ESP of +1.33% and a Zacks Rank #3.
CMG’s earnings beat the consensus mark in three of the last four quarters and missed once. It has a trailing four-quarter earnings surprise of 0.5%, on average.
Starbucks Corporation (SBUX - Free Report) has an Earnings ESP of +2.73% and a Zacks Rank #3.
SBUX’s earnings beat the consensus mark in two of the last four quarters and missed twice. It has a trailing four-quarter earnings surprise of 4%, on average.
The Wendy's Company (WEN - Free Report) currently has an Earnings ESP of +4.48% and a Zacks Rank #3.
WEN’s earnings beat the consensus mark in three of the last four quarters and missed once. It has a trailing four-quarter earnings surprise of 4.5%, on average. Earnings for the to-be-reported quarter are expected to increase 17.7% year over year.
Image: Bigstock
McDonald's (MCD) to Report Q1 Earnings: What's in Store?
McDonald's Corporation (MCD - Free Report) is scheduled to report first-quarter 2023 results on Apr 25, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 5.3%.
How are Estimates Placed?
The Zacks Consensus Estimate for first-quarter earnings is pegged at $2.30 per share, indicating growth of 0.9% from $2.28 reported in the year-ago quarter. For revenues, the consensus mark is pegged at $5,566 million. The metric suggests a deterioration of 1.8% from the year-ago quarter’s figure.
Let's take a look at how things have shaped up in the quarter under review.
Factors at Play
McDonald's revenues are likely to have been negatively impacted by dismal international operated markets revenues. Although, MCD’s performance in China is likely to have improved sequentially, softening economy and COVID-19-related government restrictions continue to hurt the company. Our model predicts international operated markets revenues to decline 15.9% year over year to $1,245.6 million.
However, robust digitalization, menu innovation, expansion efforts and strong comps are likely to have aided the company’s U.S. segment’s performance. We expect total U.S. segment revenues in first-quarter 2023 to be up 4.2%, year over year. Per our model, U.S comps are to improve 1.1% driven by increases in average check growth and menu price.
On the flip side, high inflationary pressure is likely to have hurt margins in the quarter. Significant levels of food and energy inflation in Europe may have been affected. The company expects to witness food and paper inflation in 2023 between mid-to-high single digits.
McDonald's Corporation Price and EPS Surprise
McDonald's Corporation price-eps-surprise | McDonald's Corporation Quote
What the Zacks Model Unveils
Our proven model conclusively 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 +1.48% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks Poised to Beat Earnings Estimates
Here are some other stocks from the Zacks Retail - Restaurants industry that investors may consider as our model shows that these too have the right combination of elements to post an earnings beat in the quarter to be reported.
Chipotle Mexican Grill, Inc. (CMG - Free Report) currently has an Earnings ESP of +1.33% and a Zacks Rank #3.
CMG’s earnings beat the consensus mark in three of the last four quarters and missed once. It has a trailing four-quarter earnings surprise of 0.5%, on average.
Starbucks Corporation (SBUX - Free Report) has an Earnings ESP of +2.73% and a Zacks Rank #3.
SBUX’s earnings beat the consensus mark in two of the last four quarters and missed twice. It has a trailing four-quarter earnings surprise of 4%, on average.
The Wendy's Company (WEN - Free Report) currently has an Earnings ESP of +4.48% and a Zacks Rank #3.
WEN’s earnings beat the consensus mark in three of the last four quarters and missed once. It has a trailing four-quarter earnings surprise of 4.5%, on average. Earnings for the to-be-reported quarter are expected to increase 17.7% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.