NEW YORK (TheStreet) -- McDonald's Corp. (MCD) has contacted a number of ad agencies and media companies searching for ideas on which type of charitable partnership it could strike that would help it better connect with millennials, sources told the Wall Street Journal.
The fast-food giant, which earlier this month reported its steepest monthly decline in U.S. same-store sales in over 14 years, has been hurt by growing competition from fast-casual chains, the Journal noted. More importantly, millennials, a critical customer base for the company, are increasingly opting for food from competitors such as Chipotle Mexcian Grill (CMG) , according to data compiled for the Journal.
"We're always looking for great creative ideas that will resonate with our customers and giving back to our communities is part of how we do business," said McDonald's.
McDonald's has been putting more emphasis lately on trying to attract this demographic-those in their 20s and 30s- with digital marketing, the Journal said.
Shares of McDonald's are slightly lower at $90.50 in pre-market trading.
TheStreet Ratings team rates MCDONALD'S CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate MCDONALD'S CORP (MCD) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its notable return on equity, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, MCDONALD'S CORP has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
- 44.29% is the gross profit margin for MCDONALD'S CORP which we consider to be strong. Regardless of MCD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MCD's net profit margin of 15.29% compares favorably to the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.3%. Since the same quarter one year prior, revenues slightly dropped by 4.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Even though the current debt-to-equity ratio is 1.11, it is still below the industry average, suggesting that this level of debt is acceptable within the Hotels, Restaurants & Leisure industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.07 is sturdy.
- MCDONALD'S CORP's earnings per share declined by 28.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, MCDONALD'S CORP increased its bottom line by earning $5.56 versus $5.36 in the prior year. For the next year, the market is expecting a contraction of 11.2% in earnings ($4.94 versus $5.56).
- You can view the full analysis from the report here: MCD Ratings Report