McDonald's (NYSE: MCD) Stock is gaining ground while trading Monday. The price of the fast food giant's shares up 4.5% of noon ET, in the middle of a gains background of 0.5% for the S&P 500 (Snpindex: ^GSPC) and earnings of 1.1% for the NASDAQ Compound (Nasdaqindex: ^ixig).
McDonald's reported its fourth quarter results before the market opened this morning, and sales performance and earnings for the period actually came in under the expectations. But despite the loss of the top-line targets and the Wall Street bottom line, the business showed signs of improvement in key areas-and outlined the strategies managers with investors feeling bullish.
In the fourth quarter of last year, McDonald's posted non -gaap (Generally accepted accounting principles) adjusted earnings per share of $ 2.83 on sales of $ 6.39 billion. For comparison, the average analyst's estimate called for the business to post adjusted earnings per share of $ 2.86 on revenue of $ 6.48 billion. The overall revenue was down 0.3% year -on -year in the period, and gains were adjusted per share down 4%.
Despite the sales decline, investors find some bright spots in the composition of revenue. Although sales of the same shop in the US declined 1.4% compared to the previous year period due to decline in expenditure per check, sales for the internationally operated markets segment increased 0.1%-actually-actually coming in far better than the decline of approximately 1.1% roughly 1.1% predicted by Wall Street. Meanwhile, revenue for the international developmental licensed markets segment increased 4.1% year -on -year – much better than the decline of around 0.4% called by the Wall Street average.
While McDonald's saw some ongoing challenges relating to a case of E. Coli last year, management expects these issues in the Rearview mirror by the second quarter. As a result, profitability is expected to see significant improvement.
McDonald's says it will continue to focus on building its digital ordering platform and prioritizing value -focused menu offerings. On the other hand, the company says it is already seeing improvements for average checking quantities and customer traffic in the US and other markets.
The company predicts that the impact of menu and digital ordering enterprises and improving trends for check size and customer traffic will secure results improvements that really begin to appear in the second quarter. With McDonald's stock up only 6% over the past year despite a 21% rally for the S&P 500 index, the company's share price could have a place to run if trends shaped in line with management expectations.