This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

McDonald's Earnings Report Is Beginning of the End for Restaurant Bull Market

NEW YORK (TheStreet) -- Shares of McDonald's (MCD - Get Report) are roughly flat Tuesday morning after the company -- a bellwether for restaurant stocks -- reported first-quarter earnings that missed estimates.

McDonald's stock -- which has risen 3% this year -- was recently trading at $99.50, down 17 cents.

WATCH: More videos from Jim Cramer on TheStreet TV

While first-quarter revenue of $6.3 billion met analysts' average estimate, earnings per share came up 3 cents short at $1.21.

Revenue was up just 1.4% versus the same quarter last year, while net income fell 5.1%. While global same-store sales rose 0.5%, they fell 1.7% in the U.S. Given that the company generated about 31.5% of total revenue from domestic locations last year, the drop in U.S. same-store sales is a concern for the market.

McDonald's, arguably one of the best-run companies in the business, has a market capitalization of $99 billion, three times that of its closest competitor, Yum Brands (YUM - Get Report).

McDonald's also boasts among the highest net profit margins among publicly traded restaurant companies, at close to 20% during 2013. The stock is widely followed by analysts, and earnings shortfalls, especially in this environment, may be a harbinger of things to come for the industry as a whole.

MCD Chart MCD data by YCharts
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
MCD $117.54 0.45%
YUM $66.76 0.44%
AAPL $94.27 -0.76%
FB $101.00 1.47%
GOOG $684.12 0.89%


Chart of I:DJI
DOW 15,914.74 -99.64 -0.62%
S&P 500 1,851.86 -0.35 -0.02%
NASDAQ 4,283.5920 +14.8290 0.35%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs