McDonald’s CFO Flags Tough Market Conditions, Adopts Cautious Stance On Consumer Spending

• CFO Ian Borden said that the company believes it is positioned to deliver another solid quarter of growth in each of its segments in the fourth quarter.  
• Its adjusted earnings per share were $3.22, compared with estimates of $3.33.
• Borden said that there is no change in trend related to high-income consumers.

McDonald’s (MCD) Chief Financial Officer Ian Borden said on Wednesday that the fast-food chain was seeing a continued challenging environment and is more cautious about the consumer overall.

“The conditions still remain challenging in the U.S. and we certainly see that as well in many of our top international markets,” Borden said during a post-earnings call. “We saw that in the U.S. it kind of got worse through the third quarter and into the start of the fourth quarter,” he added.

Q4 Expectations

Borden said that the company believes it is positioned to deliver another solid quarter of growth in each of its segments in the fourth quarter.  

“We actually expect our comp sales growth will accelerate in the fourth quarter versus the 2.4% that we delivered in the third quarter,” Borden added. 

Retail sentiment on McDonald’s improved to ‘bullish’ from ‘bearish’ territory compared to a day ago, with message volumes at ‘high’ levels, according to data from Stocktwits. Shares of the company rose nearly 3% in early trading.

McDonald’s Q3 Results

McDonald’s third-quarter revenue came in at $7.08 billion, compared with Wall Street expectations of $7.09 billion, according to data from Fiscal AI.

Its adjusted earnings per share were $3.22, compared with estimates of $3.33.

Borden said that there is no change in trend related to high-income consumers. “We've talked pretty consistently for quite a while now about the bifurcated consumer environment in the U.S.,” he noted.

“I would just say that the Q3 data only continued to emphasize and maybe even showed that bifurcation, I would call it extending, because, as we said, the low-income consumer was down in terms of visits to QSR and the high-income consumer was up high single-digit,” Borden added.

Shares of McDonald’s have gained nearly 7% this year. 

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