McDonald’s Corporation (MCD) has had a rocky year and can’t seem to catch a break. Yesterday, McDonald’s reported its biggest domestic same-store sales plunge in a decade. The news came just a day after McDonald’s announced it is expanding its customized burger program to the U.S.
Can McDonald’s recover from this latest blow?
McDonald’s Company Profile
Everyone knows the McDonald’s name and the golden arches. McDonald’s has been a staple of the American culture for seven decades.
McDonald’s is the world’s number one fast food company by sales and operates more than 35,400 restaurants serving burgers and fries in more than 100 countries. McDonald’s currently employs 440,000 full-time employees.
McDonald’s Retail Rundown
Yesterday, McDonald’s reported that its global sales fell 2.2% in November, completely missing analysts’ estimates of 1.7%. Breaking it down by region, comparable stores sales plunged 4.6% in the U.S.
Sales in Europe declined 2% and were offset by weak reports from Russia and negative results from France and Germany. Asia sales were down by 4%, which can be attributed to supplier issues in China and Japan. Latin America seems to be a bright spot for McDonald’s, where it posted positive performance.
Looking Ahead
McDonald’s poor comparable sales results will impact the MCD stock’s fourth-quarter earnings report. McDonald’s now expects a top-line contraction. McDonald’s also expects continued supplier issues in China and a strong U.S. dollar to weigh on fourth-quarter results.
McDonald’s Current Ratings
McDonald’s stock has been in “hold” territory since June because institutional buying pressure has remained weak. MCD stock currently receives a “C” for its Quantitative Grade.
On the fundamentals side, MCD could also use some work. Of the eight fundamental metrics I graded McDonald’s on, return on equity is the only metric where MCD excels earning an “A.” The other seven fundamentals, including sales growth, earnings growth and cash flow, all received “Cs” or “Ds.” So, MCD also receives a “D” for its Fundamental Grade.
As of this posting, Dec. 9, I consider MCD stock a “C-rated hold.”
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
