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What Do Analysts Expect from McDonald’s Revenue in 2019?

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Analysts’ expectations

For 2019, analysts are expecting McDonald’s (MCD) to post revenue of $21.01 billion, which represents a marginal fall of 0.1% from 2018. The refranchising of company-owned restaurants and unfavorable currency translation are likely to lower the company’s revenue this year. However, the net addition of new franchised restaurants and positive SSSG (same store sales growth) are expected to offset the majority of the declines in McDonald’s revenue.

McDonald’s is focusing on the expansion of EOTF (Experience of the Future) delivery service, menu innovations, and implementation of digital advancements to drive its SSSG.

By the end of the first quarter, the company had converted 8,000 restaurants in the US to EOTF with 400 restaurants transformed in the first quarter. The company’s management expects to convert 2,000 restaurants to EOTF this year.

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McDonald’s delivery business, which includes sales from both franchised and company-owned restaurants, has crossed $3 billion. By the end of the first quarter, the company offered McDelivery in over 20,000 restaurants across 75 countries. With the success of delivery service, the company continues to expand the service to other restaurants also.

McDonald’s is planning to utilize Dynamic Yield’s decision technology to provide a more personalized experience to its customers. The technology can be utilized to offer customers different menu items depending on the time of day, weather, and trend.

The company launched Two for $5 Mix & Match in April across the US to complement both its breakfast and Dollar Menu. Management expects to launch more such value deals this year in the US. All these initiatives are expected to contribute to the company’s sales growth.

Peer comparisons

During the comparable period, analysts expect Starbucks (SBUX), Wendy’s (WEN), and Jack in the Box (JACK) to post revenue growth of 5.7%, 7.1%, and 10.0%, respectively.

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