On Monday, iconic fast food chain McDonald's Corp. MCD released its fourth quarter fiscal 2016 financial results, beating expectations on both the top and bottom lines.
Earnings per share came in at $1.44, surpassing the Zacks Consensus Estimate of $1.41 per share (investors should note that these figures take out stock option expenses); net income was $1.19 billion, down 1% from the prior year period. Revenues came in at $6.03 billion, also beating our consensus estimate of $5.98 billion but falling 5% year-over-year.
McDonald's reported a same-store sales decline of 1.3%, suggesting the popularity of its All-Day Breakfast menu may be waning. About a year ago, the company reported a 5.7% surge in comps thanks to its breakfast strategy, but it looks like that was a temporary boost. Internationally, McDonald's same-store sales fared much better, rising 2.7% in Q4.
CEO Steve Easterbrook does not appear to be worried though. In fact, he's actually pretty bullish. "I'm confident that we are well-positioned to transition to a longer-term focus in 2017. Our refranchising efforts and financial discipline will enable us to direct our capital and G&A resources towards new strategic opportunities to deliver on our long-term strategy," he said in the company's earnings release.
Now that its All-Day Breakfast initiative is such a huge success for the company, what's next for McDonald's? The burger chain has been constantly revamping its menu-using buns that no longer contain high fructose corn syrup, using chicken not treated with antibiotics, multiple Big Mac sizes, and switiching to cage-free eggs, among many others-but it will need another campaign like All-Day Breakfast, especially as competition in fast food gets hotter and hotter.
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