McDonald’s, the global fast-food giant, is set to release its first-quarter financial results on Tuesday. Wall Street analysts are expecting earnings per share of $2.72 and revenue of $6.16 billion.
The company faced challenges in the fourth quarter, with disappointing sales due to boycotts in the Middle East and other markets. The boycotts were a result of the Israeli licensee offering discounts for soldiers, which led to pressure on sales. McDonald’s had to temporarily close some locations to ensure the safety of its employees during protests.
To address these issues, McDonald’s recently announced its decision to purchase the 225 restaurants operated by its Israeli franchisee. This move is aimed at strengthening its presence in the region and improving sales.
In the United States, McDonald’s has experienced a decline in spending from low-income customers. Analysts predict that this trend will continue in the first quarter, with estimated domestic same-store sales growth of just 2.6%. This reflects the ongoing challenges faced by fast-food chains in attracting price-sensitive customers.
As a result of these challenges, McDonald’s shares have fallen by 7.7% year-to-date, bringing its market value down to $197 billion. However, there are opportunities for investors to consider.
According to CNBC, some analysts believe that now is the time to invest in tech stocks like Apple and Nvidia, as well as dividend stocks, which are expected to outperform. Bank of America has released a list of recommended dividend stocks for investors to consider.
In conclusion, McDonald’s is facing challenges in both international and domestic markets, with boycotts and declining consumer spending impacting its sales. However, the company is taking steps to address these issues, such as acquiring its Israeli franchisee’s restaurants. Investors should keep an eye on McDonald’s financial results and consider opportunities in other sectors, such as tech stocks and dividend stocks.
