McDonald’s Stock Rises Despite Q4 Earnings Miss: Retail’s Upbeat

Shares of McDonald's Corp ($MCD) rose more than 4% on Monday as the fast food giant said its global comparable sales rose in the fourth quarter even as it missed street earnings and revenue estimates, with retail mood staying upbeat.

McDonald's Q4 revenues came in at $6.39 billion, below consensus estimates of $6.48 billion. Its Q4 global comparable sales increased 0.4%, beating a 0.41% decline quoted by analysts.

Q4 earnings per share stood at $2.83, below the $2.84 expected by Wall Street analysts. Its revenues stood at $6.45 billion, missing Wall Street consensus estimates of $6.39 billion.

"Accelerating the Arches continues to be the right strategy as we focus on growing market share," said McDonald's Chairman and CEO Chris Kempczinski. "We're playing to win, focusing on our customers with outstanding value, exciting menu innovation and culturally relevant marketing."

Sentiment on Stocktwits turned ‘extremely bullish’ from ‘bearish’ a week ago, the highest in three months. Message volumes also rose to ‘extremely high’ from ‘normal.’

McDonald's has pushed promotion value-driven campaigns over the past year, with some success with the new Chicken Big Mac sandwich, but the company was dealt a setback with a recent E-coli outbreak that lead to at least 34 hospitalizations and one death linked to certain contaminated quarter pounder burgers. McDonald’s has assured it expects to fully recover from the impact by spring.

Its Q4 U.S. same-store sales dropped 1.4% due to customers pulling back on spending per visit amid the E-Coli outbreak. Sales in its international markets grew 0.1% and its international developmental licensed markets segment increased by 4.1%.

McDonald’s plans to open 2,200 restaurants globally in 2025, with around 600 of those locations planned in the U.S. It sees McDonald's 2025 operating margins in mid to high 40% range.

Other restaurants chains that have posted earnings with an uptick in customers in the last quarter include Chipotle Mexican Grill and Chili’s parent Brinker International.

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