On Monday, prior to the opening bell at Wall Street, McDonald’s will post its fourth quarter earnings. Investors might need to be prepared for results that were marred by harsh weather during the winter that likely hurt sales at the burger chain.
The fast food behemoth, which will soon post the sales figures, does not seem to be immune to the ongoing slump in restaurant sales from December to January.
In a survey just released by an online research firm, 22 domestic franchisees from McDonald’s, who own collectively over 168 stores, estimated that sales at same stores dropped by 1.2% during the fourth quarter.
Based upon the results, the online research firm lowered its estimates of sales of same stores by over 70 basis points to a drop of 1.2%. Analysts are expecting those sales to drop by 1.4%.
One Wall Street analyst said that an adverse month of December, partially if not completely due to harsh weather, was to blame for the drop.
The analyst said earlier in January that sales for November, which was the second best month for the chain restaurant in the U.S. for sales at same stores for all of 2016, should prevent the fourth quarter overall from being bad.
In addition, McDonald’s began to lap its McPick 2 launch during January. That promotion along with its All-Day Breakfast buoyed sales at same stores by 5.7% domestically during the 2015 fourth quarter.
Analysts are currently expecting McDonald’s to post earnings of $1.41 a share with revenue of $5.98 billion.
An analyst on Wall Street said that he maintained a favorable bias over the long term to McDonald’s thanks to its successful turnaround strategically that it mounted to date.
Still, McDonald’s has quite a way still to go relative to technological advances as well as in distinguishing itself from other fast food establishments in such a saturated market.
A number of analysts said they are anticipating hearing about the modernization campaign at McDonald’s when the company releases is guidance for 2017. New digital initiatives will be important to sustain its momentum over both the midterm and the long-term, said analysts.
Shares at McDonald’s were higher between September and December by 5.5% showed a report released by an online Wall Street research firm.