McDonald’s Corporation (MCD) will report its results for the fourth quarter on Wednesday, after market close.
Wall Street expects the fast-food chain to post earnings per share of $3.05, implying a rise of 7.8% on a revenue of $6.84 billion, representing year-over-year growth of about 7%.
McDonald’s is heading into its quarterly results against a mixed operating backdrop marked by resilient demand for value offerings but persistent macro and cost pressures. The company continues to face weaker traffic among lower-income consumers amid ongoing inflation, while discounting, promotions and menu innovation have supported sales but weighed on margins alongside restructuring and rising input costs such as beef.
Signs of anti-American sentiment and softer demand in certain markets, even as value positioning helps quick-service chains capture trade-down spending. In India, the local franchisee is pushing faster delivery to revive same-store sales in a competitive environment with elevated expenses.
Together, recent developments point to steady top-line support from pricing, promotions and convenience initiatives, offset by demand softness at the low end and cost headwinds across key markets.
According to Alpha’s Quant Rating system, MCD is rated Hold with an overall score of 3.21 out of 5, reflecting an A+ grade in terms of profitability but has a D- in terms of valuation.
An analyst said McDonald’s outlook hinges on pricing-led growth and cash flow durability, noting that “revenue growth is expected to be ticket-driven, not volume-led, as lower-income consumer traffic remains pressured,” and adding that “cash conversion is the critical variable.”
Over the last two years, MCD has beaten EPS estimates 50% of the time and has beaten revenue estimates 50% of the time.
Over the past three months, EPS estimates have seen 15 upward revisions and 10 downward revisions. Revenue estimates have seen 17 upward revisions and three downward moves.