McDonald's Corp. (MCD) is scheduled to report financial results for the second quarter before the market opens on Friday, with analysts expecting the company to report about 15% increase in profit from the year-ago quarter. The results are expected to be boosted by the company's recently introduced healthier offerings.
On average, 21 analysts polled by Thomson Reuters expect the company to earn $1.12 per share for the quarter, with estimates in the range of $1.08 to $1.16 per share. Quarterly revenues are expected to be up nearly 5% at $5.91 billion. Analysts' estimates typically exclude special items.
The Dow component has more than 32,000 local restaurants serving over 60 million people in more than 117 countries each day. More than 80% of McDonald's restaurants worldwide are owned and operated by franchisees that are independent local men and women.
"Consumers visited McDonald's more often to enjoy a wide range of beverage offerings including value-based drinks, frappes and the entire McCafe line-up, everyday value menu options, led by the recently introduced Breakfast Dollar Menu, and classic core favorites like Chicken McNuggets," the company said recently.
Despite the economic crisis curbing discretionary spending, Oak Brook, Illinois-based McDonald has continued to outperform the informal eating out market and gain market share with its themed food events, three-and four-price tier menus, restaurant reimaging and extended hours. Not long ago, the company also began selling strong coffee to capture market share from specialty coffee retailer Starbucks Corp. (SBUX), and installed counters to sell cappuccino and lattes through 2009.
McDonald's performance has recently been helped by its compelling food and beverage value offerings, like the addition of Frappes to the McCafe line-up as well as the popularity of the Shrek-themed Chicken McNugget and Happy Meal promotions to motivate kids to eat more fruits, vegetables and dairy products. The company also launched a line of all-fruit smoothies earlier this month.
Meanwhile, the company has had its share of controversies during the second quarter, with the voluntary recall of about 12 million drinking glasses featuring characters from the "Shrek" movie series as the designs on the glasses contain the toxic metal cadmium, which can pose health risks.
The consumer advocacy group, Center for Science in the Public Interest or CSPI, also issued a notice to McDonald's for using toys to promote its popular Happy Meals, stating that it would sue the fast-food chain if it continues the promotion. McDonald's spokesman Walt Riker says the company has been working since 2003 to make its menu more appealing to health-conscious consumers, and called the CSPI's complaints "unprofessional" and "destructive."
For the second quarter of fiscal 2009, the company reported a 8% decline in profit on 7% decline in revenues, weighed by by negative impact from foreign currency translation.
At the same time, for the first quarter, McDonald's reported a year-over-year growth in profit to $1.09 billion or $1.00 per share, helped by 10% revenue growth achieved on the back of the strength of the company's value-menu items. Global comparable sales increased 4.2%, with the U.S. up 1.5%, Europe up 5.2% and Asia/Pacific, Middle East and Africa up 5.7%.
Global comparable sales increased 4.9% for April, and rose 4.8% for the month of May.
While announcing sales results for May, McDonald's noted that it expects foreign currency translation to have a negative impact on earning per share for the full year, based on current foreign currency rates, particularly the euro which accounts for about 25% of its consolidated operating income. For the full-year 2010, analysts are currently looking for earnings of $4.49 per share, on revenues of $23.50 billion.
However, the company added that foreign currency translation is expected to have minimal to no impact on second-quarter earnings per share.
Among others in the industry, Yum! Brands, Inc. (YUM), the parent of the Taco Bell, Pizza Hut and KFC chains, reported in mid-July that its second-quarter profit declined 6% year-over-year on higher provision for income taxes. However, adjusted earnings per share grew 17% to $0.58 on 4% sales growth as strong growth in China and Yum! Restaurants International helped offset weakness in the company's U.S. operations.
MCD closed Thursday's regular trading session at $71.40, up $1.29 or 1.84% on a volume of 6.72 million shares, lower than the three-month average volume of 7.43 million shares. In the past 52-week period, the stock has been trading in a broad range of $53.88 to $71.84.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.