MCD (Post-Call) Fundamental Challenges Expanding

By Mark Kalinowski Published on October 22, 2019 at 12:00 AM

Earlier today, McDonald’s (MCD; Neutral) reported third-quarter EPS of $2.11, falling short of our $2.21 forecast and sell-side consensus (according to Consensus Metrix) of $2.21. Tax rate accounts for $0.02-$0.03 of the difference between actual and our forecast. Other factors behind the EPS miss include lower-thananticipated revenues from franchisee/affiliates ($3.014 billion actual vs. $3.090 billion projected), weaker-than-projected franchised margins (81.4% actual vs. 81.9% projected), lower-than-anticipated Other Operating Income ($49.5 million actual vs. $66.2 million estimated), and higher-than-forecasted SG&A/Revenues (10.0% actual vs. 9.8% forecasted).

Read More