McDonalds reports 2nd Quarter 2014 earnings on July 22: In Q1
2014, McDonalds revenue rose only 1% versus the prior-year quarter.
Operating income declined 1%. Investors will avidly watch for
improvement in revenue and earnings trends. Theyll also seek
clarity on several fronts, including the following 5 questions
Whats the status of The Test? McDonalds is testing a mobile
ordering app in Columbus, Georgia. Customers will be able to save
favorite orders on their smartphones. Is the app ready for
nationwide rollout? How will this affect revenue? Image: iTunes App
Have we got a problem with millennials? A Consumer Reports
study out this month pegged MCD dead last out of 21 burger
restaurants for consumer preference. Millennials in particular are
avoiding McDonalds. Coca-Cola predicts that the global youth market
will control 70% of the worlds spending power by 2020
Have we got a problem with millennials? Image: McDonalds
Instagram feed home page. And they formed an entire business
strategy around this fact -- a year ago. Will McDonalds address the
Consumer Reports findings on its conference call? MCD investors
want to know that a detailed plan exists to change millennials
perceptions about the company.
Any progress on McDonalds 4 problem children? MCD has four
problem countries in 2014, or, as management likes to call them,
priority markets: the U.S., Germany, Japan & Australia.
Geschmacksvolltreffer (Taste Hit)! German McRib image by
goodiesfirst under Creative Commons license.
Any progress on McDonalds 4 problem children? Germany and Japan
have been particularly vexing, pulling down otherwise positive
results in Europe and Asia in Q1. In total, the four countries
contribute more than 60% to MCDs total operating income. In the
second half of 2014, as these four markets go, so will go the rest
of McDonalds financial performance.
Is the back-to-basics theme gaining market share in 2014?
Management has refocused on its most profitable daypart, breakfast.
Its also promoting MCDs core menu in 2014, including stalwarts such
as the Big Mac and the companys signature french fries. The humble,
mega-selling french fry. Image: McDonalds.
Is the back-to-basics theme gaining market share in 2014? The
refocus seems sound. Look for initial indications of this push on
the earnings conference call. Coffee drives breakfast traffic.
How is new store development in China proceeding? China is a
bright spot in Asia. Comparable sales grew 6.6% last quarter. China
McDonalds locations offer delivery, a service thats growing by
double digits. McDonalds China delivery bike image by Augapfel
under Creative Commons License.
How is new store development in China proceeding? The company
plans to open 300 new stores in China this year. How many have been
opened in the first half of the year? Still on target for 300 by
year end? Worlds smallest McDonalds, Pudong district, Shanghai,
China. Image by David Leo Veksler under Creative Commons
Watch for MCD Earnings on July 22: The Golden Arches need some
burnishing -- its high time the company shows strong same-store
sales growth. Information on the 5 questions outlined here will
also provide some sense of where McDonalds is headed in the back
half of 2014.
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