Will the re-franchise continue to drive earnings growth in the first quarter of 2019 for McDonald's?

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McDonalds (NYSE: MCD), an American fast food company, is expected to announce its first quarter 2019 results on April 30, 2019, followed by a conference call with badysts. The market expects the company to report a turnover of nearly $ 4.9 billion in the first quarter of 2019, which would represent a decline of 4.1% year-on-year. The decrease is mainly expected with the ongoing re-franchise of the restaurants. The market expects the company to report a profit of 1.76 USD per share in the first quarter of 2019, slightly lower than 1.79 USD per share for the same period of the previous year.

We summarized our key expectations for the announcement of results in our interactive dashboard: Which drove McDonald's incomes & amp; Spending in the last few quarters and what can we expect for 2019? Plus, here's more Consumer Discretionary Data.

Key factors affecting revenue:

Business figure to badign:

• McDonald's is experiencing a steady decline in sales over the past two years. This is because McDonald's places a great deal of emphasis on re-franchising and plans to move 95% of Total restaurants to franchised restaurants. (92.7% at the end of fiscal 2018) In the first quarter of 2019, we expected a decrease in our revenue (year-over-year) due to the continuation of our franchise plans.
• The United States is leading the group's contribution to total business turnover with 36.5% in 2018. Trefis estimates that the sector is expected to generate $ 8.1 billion in 2019, as new restaurants will be added and new franchises will be opened.
• The international lead market ranked second for the group's total revenue contribution to 36.1% in 2018. Trefis estimates that the segment will contribute $ 7.8 billion in 2019, the average of Increasing controls and more restaurants being the subject of a re-franchise.
• High-growth markets experienced lower revenues due to lower average incomes. Trefis estimates that the segment will contribute $ 4 billion to the total business figure in 2019, as more and more restaurants are added and many franchisees again.
• The sector recorded a decline in sales while the re-franchise continues. Trefis estimates that the sector will contribute $ 1.7 billion to total business in 2019, as more and more restaurants will be added and many will be re-franchised.

Trend of expenditure:

• In terms of revenues, total expenses also decreased in the 2018 quarters compared to 2017. This is explained by the fact that McDonald's is focusing heavily on re-franchise projects aimed at having 95 % of restaurants Total duty free (92.7% at the end of fiscal 2018). and therefore the operating costs of a restaurant operated by the company have decreased. In the first quarter of 2019, we expect a decrease in total expenses (year-over-year) due to the continuation of the Company's re-franchise plans.
• EBITDA margins are expected to increase due to better operational efficiency and re-franchising.
• Indirect spending is expected to be around $ 5.1 billion.

Outlook for the year:

• For the full year, we expect gross revenues to grow 2.4% to $ 21.5 billion in 2019.
• Growth should be stimulated by the continued addition of restaurants and the increase in average restaurant income. Trefis estimates that more than 1,200 new restaurants by the end of 2019 (all segments).
• The US segment is expected to generate the highest revenue at $ 8.1 billion.
• The EBITDA margin should continue to increase and be around 53.6%.

Trefis estimates the price of McDonald's shares at $ 196 per share. This value is based on revenue and earnings growth forecasts as the re-franchise continues and the average revenue per store increases.

What is behind Trefis? Find out how this feeds new collaboration and badumptions

For CFO and financial teams | Product, R & D and Marketing Teams

More data Trefis

Do you like our cards? To explore example of interactive dashboards and create yours.

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McDonald's (NYSE: MCD), an American fast food company, is expected to announce its first quarter 2019 results on April 30, 2019, followed by a conference call with badysts. The market expects the company to report a turnover of nearly $ 4.9 billion in the first quarter of 2019, which would represent a decline of 4.1% year-on-year. The decrease is mainly expected with the ongoing re-franchise of the restaurants. The market expects the company to report a profit of 1.76 USD per share in the first quarter of 2019, slightly lower than 1.79 USD per share for the same period of the previous year.

We summarized our key expectations for the announcement of results in our interactive dashboard – What have been McDonald's revenues and expenditures in recent quarters and what can we expect for 2019? In addition, here is more data on consumer discretionary.

Key factors affecting revenue:

Business figure to badign:

• McDonald's is experiencing a steady decline in sales over the past two years. This is because McDonald's places a great deal of emphasis on re-franchising and plans to move 95% of Total restaurants to franchised restaurants. (92.7% at the end of fiscal 2018) In the first quarter of 2019, we expected a decrease in our revenue (year-over-year) due to the continuation of our franchise plans.
• The United States is leading the group's contribution to total business turnover with 36.5% in 2018. Trefis estimates that the sector is expected to generate $ 8.1 billion in 2019, as new restaurants will be added and new franchises will be opened.
• The international lead market ranked second for the group's total revenue contribution to 36.1% in 2018. Trefis estimates that the segment will contribute $ 7.8 billion in 2019, the average of Increasing controls and more restaurants being the subject of a re-franchise.
• High-growth markets experienced lower revenues due to lower average incomes. Trefis estimates that the segment will contribute $ 4 billion to the total business figure in 2019, as more and more restaurants are added and many franchisees again.
• The sector recorded a decline in sales while the re-franchise continues. Trefis estimates that the sector will contribute $ 1.7 billion to total business in 2019, as more and more restaurants will be added and many will be re-franchised.

Trend of expenditure:

• In terms of revenues, total expenses also decreased in the 2018 quarters compared to 2017. This is explained by the fact that McDonald's is focusing heavily on re-franchise projects aimed at having 95 % of restaurants Total duty free (92.7% at the end of fiscal 2018). and therefore the operating costs of a restaurant operated by the company have decreased. In the first quarter of 2019, we expect a decrease in total expenses (year-over-year) due to the continuation of the Company's re-franchise plans.
• EBITDA margins are expected to increase due to better operational efficiency and re-franchising.
• Indirect spending is expected to be around $ 5.1 billion.

Outlook for the year:

• For the full year, we expect gross revenues to grow 2.4% to $ 21.5 billion in 2019.
• Growth should be stimulated by the continued addition of restaurants and the increase in average restaurant income. Trefis estimates that more than 1,200 new restaurants by the end of 2019 (all segments).
• The US segment is expected to generate the highest revenue at $ 8.1 billion.
• The EBITDA margin should continue to increase and be around 53.6%.

Trefis estimates the price of McDonald's shares at $ 196 per share. This value is based on revenue and earnings growth forecasts as the re-franchise continues and the average revenue per store increases.

What is behind Trefis? Find out how this feeds new collaboration and badumptions

For CFO and financial teams | Product, R & D and marketing teams

More data Trefis

Do you like our cards? Explore examples of interactive dashboards and create your own.