McDonald’s Earnings per Share Decline 16.5% in 1Q15

McDonald's 1Q15 Earnings Leave Markets Hungry for More (Part 1 of 5)

Earnings per share

McDonald’s (MCD) first-quarter earnings were released on April 22, 2015. The company reported an adjusted EPS (earnings per share) of $1.01, representing a loss of 16.5% against an EPS of $1.21 in the corresponding quarter of 2014. This makes it the fifth-consecutive quarter of negative EPS growth for MCD. The strength of the US dollar took a -$0.9 toll on EPS.

The company reported an operating income of $1.4 billion—a 28% decline from $1.9 billion in the same quarter last year. Operating profit margins also fell to 23.3% from 28.9% as a percentage of sales. We’ll discuss the company’s financial performance in more detail later in this series.

In the US, McDonald’s competes with fast-food chains, including KFC under the umbrella of Yum! Brands (YUM) and Wendy’s (WEN), that are moving toward a fully franchised model. It also competes with fast-casual restaurants such as Chipotle Mexican Grill (CMG) as well as local food retailers.

The Consumer Discretionary Select Sector SPDRE Fund (XLY) holds 4% of MCD and will offer you diversified exposure to the restaurant industry .

In this quarterly overview, we’ll take a look at the earnings as well as the strategic changes and new tactics that McDonald’s management discussed during the earnings call.

We’ll discuss key value metrics including same-store sales and unit growth. Then, we’ll look at the company’s financial performance and how the market reacted to its earnings. Our goal is to help you understand the company well enough to make a good investment decision.

Continue to Part 2

Browse this series on Market Realist:

• Part 2 - McDonald’s Same-Store Sales Growth Continues Slide in 1Q15

• Part 3 - McDonald’s Unit Growth in Question in 1Q15

• Part 4 - McDonald’s Management 2015 Initiatives and Outlook