24/7 Wall St. Insights
- McDonald’s Corp. (NYSE: MCD) stock has far underperformed the S&P 500 this year.
- The fast-food giant has rolled out its newest attempt to supercharge sales: the Chicken Big Mac.
- Also: Dividend legends to hold forever.
The $5 Meal Deal did too little to boost McDonald’s Corp. (NYSE: MCD) sales enough to impress investors. The aim was to attract value-minded customers who thought McDonald’s had become too expensive. A four-piece McNuggets, small fries, soft drink, and a McChicken or McDouble for $5 did lift sales some. The fast-food company extended the deal until the end of the year.
But McDonald’s needed more. Its stock is up 2% this year, while the S&P 500 is 20% higher. McDonald’s has rolled out its newest attempt to supercharge sales: the Chicken Big Mac.
With two juicy chicken patties, special sauce, lettuce, cheese, and pickles on a sesame seed bun, McDonald’s might steal some customers from Chick-fil-A and several other chains with chicken products. McDonald’s already has Chicken Nuggets and McCrispy chicken sandwiches. Perhaps they sell well enough that McDonald’s wants another chicken offering. For now, the rollout of the sandwich has not gone nationwide. According to USA Today, it was tested in London first, then brought to Miami in 2022.
What irks investors is that McDonald’s is not growing anymore. In the most recent quarter, revenue fell 1% to $6.5 billion. Same-store sales worldwide dropped 1%, and they dropped by about the same number in the United States.
Chris Kempczinski, the board chair and CEO, said he had new weapons to increase sales when he commented on earrings. One was chicken products. Kempczinski gets to prove his point when third-quarter earnings are released. The effects of the Chicken Big Mac won’t show up until the fourth quarter.
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