Steady growth apt for McDonald's again
CHICAGO (MarketWatch) – With
According to the average estimate of analysts polled by FactSet, McDonald's (MCD) should earn $1.38 a share on revenue of $6.95 billion. That compares with profit of $1.35 a share on sales of $6.91 billion in the year-earlier period.
Same-store sales in the latest completed quarter are seen rising 2.8%.
Thriving in downturn
McDonald's has survived, even thrived, during the global economic downturn as diners "trade down" to less-expensive fare. The company has also had great success with numerous new products while extended hours at many locations have lengthened the business day. The slowdown has also kept labor costs down, yet another added benefit.
Mark Kalinowski of Janney keeps a buy rating on the company's stock, "driven by impressive same-store-sales trends in the U.S., which we believe are attributable to best-in-class store-level execution. "
He also says "McDonald's will continue to grab additional market share in all three major geographies, helping the stock gradually over time."
Lynne Collier of Sterne Agee recently slightly raised her second-quarter estimate on McDonald's but noted that commodity-price pressures could be on the horizon.
"Overall, we believe the commodity basket for most of our coverage list to be up 2% to 4% in 2012, driven mostly by the proteins with some offsets related to produce and dairy," she wrote.
"However, as we look at 2013, we become more concerned given the recent spike in grain prices, [and] if this trend continues, we would expect higher-than-expected protein prices in 2013," Collier continued.
"We believe it is too early to quantify the potential impact of higher grains, and there are clearly offsets such as increased menu pricing."