McDonald’s Prepares to Give Wall Street Direction on Commodities Prices This Week

McDonald’s (NYSE:MCD) is expected to report Q4 earnings before the market open on Tuesday, January 24 with a conference call scheduled for 11:00 am ET.

Analysts are looking for EPS of $1.29 on revenue of $6.8B. The consensus range is $1.26-$1.32 for EPS, and $6.66B-$7.18B for revenue, according to First Call. After beating consensus estimates in Q3, the company said in its conference call that it expects FY12 U.S. commodity costs similar to FY11 and said it was planning to open 1,100-1,200 new restaurants worldwide this year. The company said FY11 EPS would benefit by about 20c from currency exchange. The company reported November comparable sales growth of 7.4% and October comparable sales growth of 5.5%.

Reuters recently reported that McDonald’s is nearing an agreement for a new, eight year sponsorship contract for the Olympics. JP Morgan expects McDonald’s to report strong Q4 results on January 24, but believes the stock is becoming overextended in the near-term following the recent rally. Argus expects McDonald’s to benefit going forward from continued consumer tradedown, and the firm expects the company’s margins to expand over the long-term.

Analysts and investors will listen for comments from the company on 2012 commodity prices, as well as any possible price increases.

Competitors to Watch: Chipotle Mexican Grill, Inc. (NYSE:CMG), Good Times Restaurants Inc. (NASDAQ:GTIMD), Carrols Restaurant Group, Inc. (NASDAQ:TAST), Tim Hortons Inc. (NYSE:THI), Yum! Brands, Inc. (NYSE:YUM), Jack in the Box Inc. (NASDAQ:JACK), Panera Bread Company (NASDAQ:PNRA), Nathan’s Famous, Inc. (NASDAQ:NATH), Wendy’s Arby’s Group Inc. (NYSE:WEN), Starbucks Corporation (NASDAQ:SBUX), Sonic Corporation (NASDAQ:SONC) and Darden Restaurants (NYSE:DRI).

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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