CNA Finance

About the Author CNA Finance

CNA Finance is a leading finance and investing website that offers content from contributors around the world. Focusing heavily on stock market commentary, market analysis, and investing tips; it's a great place to find articles about all things finance! Joshua’s likes to discuss where assets will move in the market, what reports may be coming out and what to expect, economic conditions and more.

McDonald’s Corporation (MCD) Produces Another Big Red Flag

McDonalds MCD Stock News

It seems like every kid’s favorite fast food restaurant doesn’t it? Well, unfortunately McDonald’s Corporation (NYSE:MCD) is struggling. As more and more consumers start to think about what’s in the food their eating and developing a desire to eat healthier, McDonald’s sales are falling; and falling hard! The long term decline in sales has led to a decline in the company’s stock and pressure from investors to do something to turn things around. Unfortunately however, any move the company has made to increase sales has resulted in more declines! Today, a new red flag has been produced by the company that tells investors to stay away. McDonald’s has announced that they will no longer be providing monthly sales reports; instead, investors will have to deal with quarterly reports. Today, we’ll talk about why McDonald’s has decided to stop providing monthly sales reports, what the company is doing to pick up sales, and what we can expect to see from MCD in the future. So, let’s get right to it…

Why Would McDonald’s Stop Providing Monthly Sales Reports

The answer is simply really; the company doesn’t want to deal with the embarrassment on a monthly basis anymore. The bottom line is that consumers are thinking about health before eating these days, but McDonald’s is known as an unhealthy place to eat. So, sales have been on a long term decline, and seem to be continuing in that direction. As a result, every time monthly sales reports are released, we see declines in the price of MCD shares. So, the only rational reason that the company would stop producing quarterly earnings reports is because they are trying to slow the declines in their stock price.

What MCD Is Doing To Pick Up Sales

In the past, we’ve seen healthier menu options added, but that didn’t seem to work. Now McDonald’s has stated that they’re ready to try something different. While they’re still going to work to improve their menu, they are also working to improve the structure of the company by franchising more of their corporate locations. However, that plan isn’t being picked up well by most investors as there seems to be a show me feeling among investors that would potentially be interested in the stock.

What We Can Expect To See Moving Forward

Unfortunately, I don’t think the outlook for MCD is very positive in either the short term or the long term. The reality is that investors know that consumers seem to be choosing alternatives more and more as time goes by. Although McDonald’s has worked to improve sales, nothing seems to be doing the job. So, I’m expecting to see more declines in sales, revenue, and the stock price from MCD moving forward until they find a way to prove that their efforts to increase sales are working.

  • Andrew K

    The statement “we see declines in the price of MCD shares” is very misleading. If you look at McDonald’s stock price over the past 3 and a half years, it’s been bound and fluctuating within $90-99 range. If there is any real reason for MCD management to worry, it would be if/when their stock goes below the $90 mark and even moves below $85. Other than that it’s stock has shown normal fluctuation. But to increase their stock value, management would need to do something to attract more sales. That’s where their ‘real’ issue is: increasing sales growth.

  • Andrew K

    another thing, to say or even mention “…but McDonald’s is known as an unhealthy place to eat.” is very unprofessional and irrelevant to this article. That is an ‘opinion’, not a fact. People can stop by and have something that is not high in fat content, just like they can at other fast food places or family sit-down restaurants. To make this statement is to label McDonalds as ‘bad’ without regard to other institutions that serve the same type of food, or aka ‘fast food’.

  • Andrew K

    “So, the only rational reason…” aka you don’t know what the REAL reason is, so you are guessing at it. So why bother even reading any more of this article and believe what you have to say?

  • Andrew K

    “The reality is that investors know that consumers seem to be choosing alternatives more and more as time goes by.” Again, you don’t know. Saying “consumers seem to be” pretty much says it – you don’t know. You didn’t do your homework to prove if this is true or not. You are guessing. An analyst should not be guessing, but using numbers as facts to support their statements.