McDonald’s (MCD): Alms For The Poor
If the result from McDonald’s (MCD) say anything it is that the low end of the consumer market in the US has not died off. For the second quarter, MCD revenue moved up 4% to $6.1 billion.Earnings per share from…
If the result from McDonald’s (MCD) say anything it is that the low end of the consumer market in the US has not died off.
For the second quarter, MCD revenue moved up 4% to $6.1 billion.Earnings per share from continuing operations of $1.04, up 44%. Shares rallied on the news.
For McDonald’s U.S., comparable sales were up 3.4% and operating income increased 6% for the quarter. That increase was bested in Europe were store sales were up 7.4% and Asia, where they rose 8.8%.
The figures for the US stand out above the rest because they could have easily been down. Some analysts worried that the recession had cut discretionary spending among the lower and middle classes so much that going out for even a modest meal would be difficult. Gas and food prices would be up so much that there was little left for anything else.
McDonald’s did help its situation by absorbing much of the higher costs of the commodities it uses to make its products. It is a smart move. The company has the balance sheet to take slightly lower margins in the name of customer loyalty.
The consumer with modest means may be hurting, but he is not dead yet.
Douglas A. McIntyre
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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
