McDonald's: Burgers, Fries & More

[Sijoittaja-alokas]

McDonald’s - The World’s Largest Fast Food Chain

McDonald’s is an American fast-food chain founded by Richard and Maurice McDonald in 1940 in California. It started as a hamburger restaurant but quickly expanded into a franchise network. The Golden Arches logo was introduced in 1953, and in 1955, Ray Kroc joined the company, eventually buying out the McDonald brothers in 1961.

Today, McDonald’s is the world’s largest fast-food chain, with over 40,000 restaurants in more than 100 countries. It serves over 69 million customers daily, with hamburgers and fries as its main items.

The company earns revenue from rents, royalties, and franchisees, as well as from the sales of its own restaurants.

McDonald’s is the world’s second-largest private employer, with 1.7 million employees.

Thoughts from an Investor’s Perspective

Many of the company’s strengths are familiar to most investors, as are its risk factors.

McDonald’s is the world’s largest fast-food chain, and its success is largely based on a strong, well-known brand and a very broad and strong global market presence.

The company’s opportunities and risks include economic fluctuations and how it manages to adapt to them. Many macroeconomic factors affect the company’s operations (which is not surprising), such as inflation and exchange rates, which impact consumer purchasing power. If McDonald’s operations and pricing go smoothly, it’s a winner, but these fluctuations can also become a problem if the company reacts incorrectly.

Consumer preferences and lifestyles are changing, but McDonald’s has adapted its menu to suit different cultures and responded to health and wellness trends by offering healthier options. The company has a strong position, but various larger trends could, in the long run, lead the company into a negative spiral.

Technological innovations, such as self-service kiosks and mobile applications, have improved the customer experience and streamlined operations. McDonald’s ability to adopt new technologies is a competitive advantage that others may not necessarily have.

McDonald’s ability to adapt to different environments and appropriately comply with regulations strengthens its position in the industry. Adopting technology is also a key factor in the company’s long-term success.

Currently, it appears that the company’s valuation multiples are moderate from an investor’s perspective… on the other hand, opposing comments have also been encountered. Dividends also interest many…

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This fits well here:

https://x.com/DividendTalks/status/1814703718094544930

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Then a few more figures

P/E Ratio: 21.08

P/S Ratio: 7.03

More figures (2023)

[ValkoinenPeura]

I noticed that tweet stating that the company owns 57 billion worth of real estate and fixed assets at acquisition cost. After depreciation, their value on the balance sheet is 38 billion. I don’t know what the value of used deep fryers should be, but naturally, they are no longer worth their original acquisition price.

A quick Google search of the official financial statements also revealed that out of that remaining 38 billion sum, 13.5 billion was right-of-use assets, i.e., lease agreements recorded on the balance sheet. I didn’t start digging into the value of the land separately.

In my opinion, that tweet gives a misleading picture of the company’s real estate assets.

[Juippi]

Deep fryers are being purchased constantly, meaning that the “at cost” figure varies quarterly as old ones are decommissioned (and removed from the balance sheet) and new ones are brought in. What is essential regarding depreciation is that the asset’s useful life is set correctly. If this has been done, the value on the balance sheet after depreciation can be interpreted as the company’s assets being, on average, in a condition where 38/57 = 66.7% of their useful life remains. You can look at the cash flow statement to see how much money is spent annually on maintaining these assets (capital expenditures). This figure is often close to depreciation if the company is not growing.

[Iltsu]

[Sijoittaja-alokas]

McDonald’s sales fell for the first time since 2020 in the second quarter, missing analyst expectations. Sales growth has slowed as consumers have cut back on spending due to price increases and tight budgets, but to attract customers, McDonald’s launched a five-dollar meal in the United States, and the initial results are promising, although the effects will only be visible later this year, so not quite yet. New products, such as the Bacon Cajun McCrispy and the “Grandma” McFlurry, also aim to draw in customers.

The company’s stock has dropped about 15% this year. Sales have declined in China and France, and boycotts caused by the conflict between Israel and Hamas are impacting the Middle East. Global sales weakened, and although the company plans to expand to 50,000 restaurants by 2027, the decline in sales at existing restaurants is a challenge regardless.

https://x.com/EconomyApp/status/1817919613394637058

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EDIT:

Actually, I was thinking the same thing as @Verneri_Pulkkinen, that one could have somehow imagined this being McDonald’s opportunity to take “space” from more expensive players.

[Sijoittaja-alokas]

Olli Koposen Tulosviikkosomistuksessa oli myös McDonald, video kelattuna oikeaan kohtaan. Kannattaa toki kuunnella toki koko podi.

Tulosviikkosummaus (2.8.2024) | inderesPodi 198

[Sijoittaja-alokas]

Fast food and the like are no longer of interest, or are we slowly bottoming out and heading back up?

https://x.com/finchat_io/status/1853044473967812862

[Sijoittaja-alokas]

Fast food and the like are no longer of interest, or are we slowly bottoming out and rising again?

https://x.com/finchat_io/status/1853044473967812862

[Sijoittaja-alokas]

Big things are happening at McDonald’s, this is real BREAKING news.

https://x.com/McFranchisee/status/1876375050821189924

[Sijoittaja-alokas]

McDonald’s once owned Chipotle, but then sold it. Was it worth it… that’s being pondered in this tweet.

https://x.com/Benzinga/status/1880053674640306196

[Sijoittaja-alokas]

The tweet below describes how McDonald’s and Cognizant are deepening their collaboration by leveraging cloud technology and AI to modernize their systems. The goal is to streamline processes such as payroll and franchise management… while improving customer and employee experiences. According to the tweet, this partnership takes McDonald’s towards a more technologically advanced future.

https://x.com/Benzinga/status/1881778036699185519

https://x.com/Benzinga/status/1881778036699185519

[Sijoittaja-alokas]

According to the article below, McDonald’s fourth quarter was challenging because an E. coli epidemic was linked to the company’s Quarter Pounder burgers in particular.

This affected customer numbers in the United States, but analysts expect the situation to have recovered towards the end of the year. UBS estimated that the incident weakened sales in November, but visitor numbers started to grow again in December.

The company will report its results on February 10.

“Traffic to McDonald’s restaurants across the U.S. fell as consumers reacted to the headlines, although analysts expect the company to report that trend reversed later in the quarter.”

https://www.cnbc.com/2025/01/28/restaurant-earnings-starbucks-mcdonalds-chipotle-to-report.html

[Sijoittaja-alokas]

McDonald’s Q4 was indeed not entirely in line with expectations, as US sales declined more than they have in a long time. This was partly due to reduced customer spending and a food scandal that hit at the end of the year, which many have surely read about. Although the situation affected sales, the company believes it will recover by the beginning of the second quarter of the year.

Internationally, the situation was better, and many markets showed moderate growth. McDonald’s plans to invest heavily this year in new restaurants and expanding its selection, for example, by bringing back familiar old items and adding new chicken products to its menu.

https://x.com/Earnings_Time/status/1888923318918545426

[Sijoittaja-alokas]

Here’s some more info about McDonald’s Q4, visualized.

https://x.com/EconomyApp/status/1888998729098940468

I got a private message showing this.. it’s in the green..

[Sijoittaja-alokas]

The article below discusses Wall Street analysts’ recommendations on dividend-paying stocks. Among them were McDonald’s, Ares Capital, and Energy Transfer.

For McDonald’s, it was mentioned that the company continues its strong global growth, with its attractive pricing and new campaigns, such as the McValue menu, drawing in more customers. Furthermore, it was noted that digital sales, home delivery, and drive-thru services strengthen the brand’s position. According to analysts, future prospects continue to promise positive development.

Noting the improving underlying traffic trends in the domestic market and solid same-store sales trends in international markets, Barish thinks that MCD is “best positioned to outperform peers in ’25+ through attractive value proposition from a scaled, global brand.”

https://www.cnbc.com/2025/02/23/top-wall-street-analysts-are-bullish-on-these-dividend-stocks.html

[Sijoittaja-alokas]

Here’s a tweet thread that delves into the company’s history, telling how Cantalupo saved McDonald’s.

https://x.com/Quartr_App/status/1895134328050352336

Rest of the tweet thread

[Sijoittaja-alokas]

An interesting comparison of the number crunching of different companies in the industry

https://x.com/ConsensusGurus/status/1900291000146288937

[Sijoittaja-alokas]

McDonald’s had a challenging start to the year, as sales declined due to a difficult market situation and economic pressures.

The number of low-income and middle-class customers decreased particularly in the United States, but wealthier customers continued to visit restaurants as usual. However, compared to competitors, McDonald’s performed quite well in terms of customer numbers, especially thanks to the new McValue offering.

At the beginning of the year, the company introduced affordable meal sets in the US and focused on customer experience, which was reflected in record-high satisfaction scores. In addition, McDonald’s established a new team to accelerate product innovations and operational efficiency globally, and despite the tight operating environment, financial targets for the year were kept unchanged.

https://x.com/Earnings_Time/status/1917898695531528302

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Official Material

[Sijoittaja-alokas]

McDonald’s announced its intention to hire up to 375,000 employees for the summer in the United States, for both its own and franchised restaurants. The news was announced at an event, which was also attended by Labor Secretary Lori Chavez-DeRemer.

According to the article, the company has grown closer to the Trump administration, perhaps partly to protect its business from potential new regulations.

At the same time, it celebrated the tenth anniversary of its training program and reaffirmed its growth targets for opening new restaurants.

https://www.cnbc.com/2025/05/12/mcdonalds-to-hire-375000-workers-trump-labor-secretary.html

[Sijoittaja-alokas]

McDonald’s and Krispy Kreme are ending their partnership at the beginning of July.

Doughnuts will no longer be sold in McDonald’s restaurants because the operation was not profitable enough for Krispy Kreme. The partnership was intended to expand, but weak demand and the economic situation prevented the plans.

https://www.cnbc.com/2025/06/24/mcdonalds-and-krispy-kreme-end-doughnut-partnership.html