McDonald’s Corporation (NYSE: MCD) reported another impressive quarter on Tuesday morning, beating analyst estimates on earnings, revenue and same-store sales in the fourth quarter. McDonald’s also says it plans to continue to heavily invest in is Experience of the Future initiative in 2018.
For the fourth quarter McDonald’s reported adjusted earnings per share of $1.71 on revenue of $5.34 billion. Both numbers beat Wall Street consensus estimates of $1.59 and $5.22 billion, respectively.
McDonald’s also reported U.S. same-store sales growth of 4.5 percent and global same-store sales growth of 5.5 percent, its best growth numbers in six years. Analysts had been expecting 4.3 percent U.S. growth and 5 percent global growth.
[See: 8 Ways to Satisfy a Craving for Restaurant Stocks.]
McDonald’s says its U.S. sales were driven by core menu performance, including the McPick 2 promotion and the new Buttermilk Crispy Tenders. In January, McDonald’s brought back a revamped version of its dollar menu for the first time in six years. The new menu launch was not included in the fourth-quarter numbers.
Looking ahead to 2018, McDonald’s says it plans to invest another $2.4 billion in rolling out its Experience of the Future, the company’s goal of boosting sales via mobile and kiosk ordering. McDonald’s installed kiosks in more than 2,500 U.S. restaurants in 2017. Stephens estimates McDonald’s generates roughly 10 percent more sales from kiosk orders than traditional orders.
McDonald’s is also emphasizing food delivery via a partnership with UberEATS, and says delivery helped drive its same-store sales beat in the fourth quarter.
“We plan to continue making meaningful investments in technology to modernize the customer experience and redefine convenience,” chief financial officer Kevin Ozan says in a statement. Ozan says McDonald’s plans to open about 1,000 new global locations.
Analysts have high hopes for McDonald’s promotion menu and Experience of the Future initiatives this year. BTIG analyst Peter Saleh says the promotion menu could help McDonald’s regain roughly $2.9 billion in lost sales since 2013.
“We believe that this value platform should give traffic back to McDonald’s,” Saleh writes in a note to investors this month. “After several years of playing defense, we believe McDonald’s is finally returning to an offensive strategy.”
[See: 7 of the Best Stocks to Buy for 2018.]
BTIG has a “buy” rating and $200 price target for MCD stock.
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McDonald’s Corporation (MCD) Reports Best Sales Growth in 6 Years originally appeared on usnews.com
