McDonald's Corp. reports earnings for the fiscal second quarter on Thursday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: McDonald's, the nation's No. 1 hamburger chain, has been faring well in the recession benefiting from its low prices and numerous locations. Same-store sales, or sales at stores open at least a year, have continued to grow in the U.S. and overseas.
But there have been some pockets of weakness. In its first quarter, sales in Germany were hurt by weak consumer confidence and China sales dragged as a number of factories in the south of the country shut down and consumers choose cheaper Chinese fast-food to save money.
But at that time, the company said issues in those countries were unique and that worldwide same-store sales for April were "at least as strong" if not stronger than in the first quarter.
Although its same-store sales have continued to grow, overall revenue has been hurt by the strong dollar. Most U.S. companies that sell goods internationally convert those sales from foreign currencies into dollars when they report their financial results. If the dollar is stronger than those currencies, the translation results in fewer dollars in revenue.
In April, McDonald's said its second- and third-quarter profit could each take an 11-cent-per-share hit from exchange rates.
Investors will likely be watching to see whether the company's new line of espresso-based coffee drinks has added to sales or profit in the quarter. McDonald's has been adding the drinks to all of its 14,000 U.S. restaurants.
BY THE NUMBERS: McDonald's has not offered any specific guidance for the quarter. Analysts polled by Thomson Reuters predict profit of 97 cents per share on revenue of $5.72 billion.
ANALYST TAKE: Deutsche Bank North America analyst Marc Greenberg said in a note to investors that he expects McDonald's to report U.S. same-store sales growth of 4.1 percent for the second quarter, with the McCafe espresso drink line contributing about 1.5 percent to 2 percent of that growth.
He said ads for the McCafe drinks launched in May likely helped boost sales volumes.
WHATS AHEAD: Investors will likely be watching the company's monthly and quarterly same-store sales to see whether consumers are continuing to bypass sit-down chains for cheaper fast-food.
STOCK PERFORMANCE: Shares rose about 6 percent during the quarter and have slipped 2.5 percent in the last 52 weeks.
