McDonald's reported weaker-than-expected fourth-quarter earnings and revenue early Monday, but global same-store sales beat. McDonald's stock rose, clearing an early buy point.
McDonald's Earnings And Outlook
For the fourth quarter of 2024, the Dow Jones restaurant giant reported EPS declined 4% vs. a year earlier to $2.83 a share. Revenue edged down 0.3% to $6.39 billion amid an E.coli outbreak weeks into the quarter.
Analysts had expected McDonald's earnings to fall 3% vs. a year earlier to $2.85 a share, with revenue up 0.7% to $6.450 billion, according to FactSet.
Same-store sales, a key retail metric, rose 0.4% vs. views for a 1% drop. That ended two quarters of declines. But U.S. same-store sales fell 1.4%, worse than expected. On Monday, McDonald's said Q4 restaurant traffic was slightly positive, but customer spending was less than usual.
For the full year, McDonald's earnings were $11.72 per share.
In 2025, analysts are forecasting EPS of $12.43, a 6% increase, FactSet shows.
On Monday, the Dow burger chain said that its U.S. sales should recover by the start of the second quarter. Value deals and menu additions will stoke the recovery this year, management said.
McDonald's Stock Offers Early Entry
Shares popped 4.8% to 308.42 on the stock market today. McDonald's stock cleared an early entry at 297.15, above Thursday's high and slightly above the 50-day line and a recent high of 294.49. It also topped resistance around 303.80.
It continues to work on a flat base with a 319.90 buy point, according to MarketSurge charts. Shares are now just 3% below that traditional entry.
Further, the relative strength line is lackluster and generally has lagged since late 2022. That reflects McDonald's stock underperforming the S&P 500 over that period.
Burger King parent Restaurant Brands is on the earnings docket early Wednesday and Dutch Bros. late Wednesday. Wendy's is due early Thursday.
Mixed Bag Of Restaurant Stocks
Several restaurant retail stocks are acting well amid earnings. Food-delivery service DoorDash is on the IBD Leaderboard and Mediterranean food chain Cava is on the Leaders watchlist. Coffee shop operator Dutch Bros. is on the IBD 50 list of top growth stocks.
Starbucks and Chili's parent Brinker International broke out on earnings in late January. Cava reports later this month.
Others are faring less well. McDonald's and other quick-serve rivals resorted to discounts and marketing gimmicks to lure customers back to their restaurants. Diners cut back spending amid inflation.
Chipotle Mexican Grill gave a weak outlook.
Please follow Aparna Narayanan on X @IBD_Aparna for more coverage.
