2. McDonald’s reports 2nd Quarter 2014 earnings on July 22:
• In Q1 2014, McDonald’s revenue rose only 1%
versus the prior-year quarter. Operating
income declined 1%.
• Investors will avidly watch for improvement in
revenue and earnings trends. They’ll also seek
clarity on several fronts, including the following
3. What’s the status of “The Test?”
• McDonald’s is testing a
mobile ordering app in
• Customers will be able to
save favorite orders on their
• Is the app ready for
nationwide rollout? How will
this affect revenue?
Image: iTunes App Store.
4. Have we got a problem with millennials?
• A Consumer Reports study out this month
pegged MCD dead last out of 21 burger
restaurants for consumer preference.
• Millennials in particular are avoiding
• Coca-Cola predicts that the global youth
market will control 70% of the world’s
spending power by 2020…
5. Have we got a problem with millennials?
• And they formed an entire business strategy around this fact --
a year ago.
• Will McDonald’s address the Consumer Reports findings on its
• MCD investors want to know that a detailed plan exists to change
millennials’ perceptions about the company.
6. Any progress on McDonald’s 4 problem children?
• MCD has four
in 2014, or, as
to call them,
the U.S., Germany,
Japan & Australia.
Geschmacksvolltreffer (Taste Hit)! German McRib image by
goodiesfirst under Creative Commons license.
7. Any progress on McDonald’s 4 problem children?
• Germany and Japan have been particularly
vexing, pulling down otherwise positive results
in Europe and Asia in Q1.
• In total, the four countries contribute more
than 60% to MCD’s total operating income.
• In the second half of 2014, as these four
markets go, so will go the rest of McDonald’s
8. Is the back-to-basics theme gaining market share in 2014?
• Management has
refocused on its most
• It’s also promoting
MCD’s core menu in
stalwarts such as the Big
Mac and the company’s
signature french fries.
The humble, mega-selling french fry.
9. Is the back-to-basics theme gaining market share in 2014?
• The refocus seems
• Look for initial
indications of this
push on the earnings
Coffee drives breakfast traffic.
10. How is new store development in China proceeding?
• China is a bright spot
• Comparable sales grew
6.6% last quarter.
• China McDonald’s
delivery, a service
that’s growing by
double digits. McDonald’s China delivery bike image by Augapfel
under Creative Commons License.
11. How is new store development in China proceeding?
• The company plans
to open 300 new
stores in China this
year. How many have
been opened in the
first half of the year?
• Still on target for 300
by year end?
World’s smallest McDonald’s, Pudong district,
Shanghai, China. Image by David Leo
Veksler under Creative Commons License
12. Watch for MCD Earnings on July 22:
• The Golden Arches need some
burnishing -- it’s high time the
company shows strong same-store
• Information on the 5 questions
outlined here will also provide some
sense of where McDonald’s is
headed in the back half of 2014.
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