By Annie Gasparro
McDonald's Corp. is scheduled to announce its fourth-quarter
earnings before the market opens on Friday.
Here's what to look for:
EARNINGS FORECAST: Analysts expect net income of $1.23 a share
for the fourth quarter and $4.93 for the year, according to Thomson
Reuters, compared with $1.40 and $5.55, respectively, a year
earlier.
REVENUE FORECAST: Revenue of $6.7 billion is forecast for the
quarter, compared with $7.1 billion a year earlier. For the full
year, analysts expect $27.6 billion compared to $28.1 billion in
2013.
WHAT TO WATCH:
--LOVE LOST: Once at the heart of the fast-food chain's
low-price, quick-service model, younger consumers, so-called
millennials, increasingly have turned their noses up at Big Macs in
favor of what they view are healthier, fresher options, like
Chipotle Mexican Grill Inc. McDonald's is working on winning them
back, but broadening the menu risks slowing service. Investors will
be looking for information on how these and other efforts, like a
social-media discussion around the quality of its food, are
working.
--MARKETING MAKEOVER: Investors will be listening for hints at
how McDonald's marketing campaign launched this month is affecting
sales. The commercials, new packaging and sprucing up of the "I'm
lovin' it" slogan are the work of McDonald's new Chief Marketing
Officer Deborah Wahl who joined in March. Paired with a new U.S.
chief, Mike Andres who took over in October, will this be the team
that leads the much-needed turnaround in McDonald's most important
market?
--TROUBLE ABROAD: A supplier scandal in China has weighed on
McDonald's sales in Asia. Executives have said these are short-term
woes. It will be interesting to see if the path to recovery is
still on track to rebound in the next few months.
Write to Annie Gasparro at annie.gasparro@wsj.com.
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