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McDonald's, Chipotle, Snap earnings — What to know in markets Tuesday

Heidi Chung

A slew of mega-cap companies are gearing up to delivery quarterly results Tuesday.

Amid geo-political uncertainty, the U.S. consumer has shown resilience. Investors will get another pulse on the consumer when heavyweights Procter & Gamble (PG) and McDonald’s (MCD) report earnings ahead of the opening bell.

Procter & Gamble is expected report continued strong sales. Investors will be particularly focused on P&G’s organic sales growth, which is estimated to have risen 4.79% with beauty organic sales anticipated to have jumped 6.17%. Health care organic sales is expected to have grown 5.17%, while analysts estimate 4.67% growth in fabric and home care organic sales, and baby, feminine and family care rose 2%, according to estimates.

Wells Fargo noted that while expectations remain high for P&G, the firm expects that organic sales growth will likely continue to be one of “the best in large-cap staples.” Analysts polled by Bloomberg expect Procter & Gamble to report adjusted earnings of $1.24 per share on $17.43 billion in revenue during its fiscal first quarter. The options market is implying a 3.5% move in either direction on P&G’s results. Procter & Gamble stock has soared 32% this year and has outperformed its peers and the broader market. The Consumer Staples ETF, XLP, rose 22%, and the S&P 500 (^GSPC) is up 21% in the same time period.

A McDonald's "PLT" burger with a Beyond Meat plant-based patty at one of 28 test restaurant locations in London, Ontario, Canada. REUTERS/Moe Doiron

Fast-food giant McDonald’s is expected to report adjusted earnings of $2.21 per share on $5.49 billion in revenue during its third quarter, according to Bloomberg compiled estimates. Same-store sales, a key metric for restaurants, is expected to have risen 4.5% in the U.S. McDonald’s announced new partnerships with third-party aggregators during its third quarter, and analysts anticipate that the new deals will likely have contributed to strong same-store sales. About 8,000 McDonald’s stores will use both DoorDash and Uber Eats (UBER). McDonald’s will have third-party delivery in 10,000 of its 14,000 U.S. stores.

Analysts predict that McDonald’s new menu innovations internationally will have boosted sales overseas. In September, the burger chain announced that it would be testing out Beyond Meat (BYND) burgers in 28 Canadian stores.

Meanwhile, Chipotle (CMG) and Snap (SNAP) will report earnings after the closing bell.

Chipotle has been on a tear this year. The stock has surged 97% and is the best-performing stock in the S&P 500 so far in 2019. The burrito chain has seen strong same-store sales momentum under CEO Brian Niccol’s leadership, and analysts expect that strong momentum to have continued during the third quarter. Analysts estimate same-store sales grew 9.3% at Chipotle due to its digital push and delivery initiative. Digital orders have higher check averages and reduce friction in the ordering process for customers. During the second quarter, digital orders represented 18.2% of sales.

Analysts expect Chipotle to report adjusted earnings of $3.21 per share on $1.38 billion in revenue during its third-quarter.

Social media giant Snap has also been on a monster really this year. Shares have soared a whopping 158% but are still below their IPO price of $17 per share. Analysts have been predicting brighter times for Snap after some tumultuous quarters of stagnant growth. Strong engagement on product updates, new filters on Snapchat are likely to have resulted in strong momentum throughout the rest of this year, according to analysts. Though the long-term story still remains foggy, Snap is expected to remain a revenue growth story for the rest of this year.

Snap is expected to have added about 4 million new daily active users during the quarter bringing the total of daily active users to 207 million. Analyst polled by Bloomberg expect Snap to report an adjusted earnings loss of 5 cents per share on $437.94 million in revenue. The options market is implying a 15% move in either direction following the results, which is less than the 18.5% average over the past four quarters.

Other notable earnings repots scheduled for Tuesday include Centene (CNC), Biogen (BIIB), Kimberly-Clark (KMB), Hasbro (HAS), Harley-Davidson (HOG), PulteGroup (PHM), Sherwin-Williams (SHW), UPS (UPS), Lockheed Martin (LMT) before market open; Whirlpool (WHR), Discover Financial (DFS), United Technologies (UTX), Texas Instruments (TXN) after market close

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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