Earnings Preview: McDonald's posts 1Q results Fri.
McDonald's set to post 1st-qtr results on Friday amid growing competition, challenging economy
NEW YORK (AP) -- McDonald's reports its first quarter results Friday, which should give investors a closer look at how the world's biggest hamburger chain is adapting under pressure from intensifying competition and challenging economic conditions.
WHAT TO WATCH FOR: Investors will be looking to see how sales at established restaurants fare in different geographic regions, as well as comments from executives on efforts the company is taking to address any specific local issues.
The Oak Brook, Ill.-based chain reports sales growth figures for the U.S., Europe and the region encompassing Asia, the Middle East and Africa. Sales at restaurants open at least a year are considered a key indicator of a company's health, because they strip out the impact of newly opened and closed locations.
WHY IT MATTERS: McDonald's Corp. managed to grow through the recession and had been a standout in the industry. But eating habits are changing, with people increasingly flocking to chains such as Chipotle and Panera that offer food that's perceived to be of higher quality for a little extra money.
Traditional competitors such as Burger King and Wendy's are also revamping their menus and stepping up their ad campaigns. And late last year, McDonald's saw a monthly sales figure fall for the first time in nearly decade.
Since then, the chain has ousted the head of its U.S. business, emphasized its focus on value and stepped up new menu introductions. Among those new offerings in the U.S. are chicken wraps, which are generally perceived to be healthier than burgers. Next week, the company is introducing a version of its Egg McMuffin made with egg whites.
The offerings come at a time when companies are trying to connect with people in their 20s and 30s, who marketers say prize freshness, quality and healthfulness more than past generations.
LAST YEAR'S QUARTER: The company earned $1.27 billion, or $1.23 per share, on revenue of $6.55 billion.
WHAT'S EXPECTED: Analysts expect a profit of $1.26 per share, on revenue of $6.59 billion.
