Seeking Alpha

Heard during McDonald's Investor Meeting

  • Execs with McDonald's (MCD -0.7%) reaffirm that they expect system-wide sales growth of 3%-5% and operating income growth of 6%-7% over the long haul.
  • Commodity costs are expected to increase in both the U.S. and Europe during 2014.
  • The company expects to end up returning $4.5B to $5B in 2013 to shareholders through buybacks and dividends.
  • 2014 Capex spending is targeted at $2.9B-$3.0B on a broad goal to open more than 1.5K restaurants and remodel another thousand.
  • Questions on where U.S. comparable-restaurant sales are tracking for Q4 are artfully dodged.
  • Investor meeting webcast
Comments (17)
  • was just at a MCD's and it was packed, anecdotal but I think the McRib was the cause...
    14 Nov 2013, 01:13 PM Reply Like
  • After watching Guy Fieri's "Diners, Drive-Ins and Dives" for several years, highlighting quality independently owned restaurants in almost every town in America, I can't image why anyone would still go to McDonalds or any of the other generic, bland, mediocre fast food chains.
    14 Nov 2013, 01:36 PM Reply Like
  • That's simple, you know what you are getting. No matter where you go in the US McDonald's food tastes relatively the same... if you go to a small independently owned place you don't know how good/bad it will be...

     

    secondly price, you know what your going to pay without searching for it... it'll be relatively quick. Not saying independents can't match this but they can't afford to advertise like McDonalds does...
    14 Nov 2013, 02:19 PM Reply Like
  • Wigit-

     

    You said it exactly!

     

    Road warriors (such as myself) want consistency. Although I might not dine at MCD, I will grab coffee and/or a snack.

     

    Hence Marriott, Hilton, Olive Garden, Outback, etc. maintain popularity due to consistency, (eg: no bad surprises while on the road), even tho they are "vin ordinaire."

     

    -rwm
    14 Nov 2013, 03:01 PM Reply Like
  • Also, a wrapped cheeseburger will easily fit in your pocket to sneak into a movie theater. At least for me, McDonald's has that niche dominated.
    15 Nov 2013, 06:57 PM Reply Like
  • Re "returning money to shareholders": how is buying back your overvalued stock returning money to shareholders? Isn't it using their money to buy stock at a very high price? And what happens to that stock? Doesn't it get reissued to management in the form of options, at a very low price? So, isn't this kind of buyback (near all-time highs) in fact taking shareholder money and transferring it into the hands of management? Wall Street is in denial.
    14 Nov 2013, 01:37 PM Reply Like
  • Mtairy-

     

    I never can understand how buy back at or near a top helps the company, let alone us shareholders.

     

    -rwm
    14 Nov 2013, 03:03 PM Reply Like
  • @Ed It's quick
    It's consistent - no surprises
    It's inexpensive.
    It would not be my first choice for fine dining, but I like it.
    14 Nov 2013, 01:44 PM Reply Like
  • Dr Fred: It's consistently mediocre. It's not "inexpensive", it's cheap! Cheap ingredients yields poor quality output. Low price does not equate to good value.
    14 Nov 2013, 02:07 PM Reply Like
  • It is not only consistency and cheap, it is about adapting to the consumer. Having raised two kids, and being away fro 20 years, (except as a shareholder) , I recently in my 60's became a big fan again. Their re-modelled "caf├ęs" are as good as the overpriced Starbucks, and with good coffee and a snack , a great place to watch the stock performance on their free wi-fi. Watch for a return to the 8-10% divi growth rate in 2014!
    14 Nov 2013, 08:58 PM Reply Like
  • Just what America needs - a population craving "consistent mediocrity" ...
    15 Nov 2013, 07:34 AM Reply Like
  • People don't crave mediocrity...
    15 Nov 2013, 08:38 AM Reply Like
  • But they do crave consistency!

     

    -rwm
    15 Nov 2013, 10:36 AM Reply Like
  • People crave mediocrity for others, and their actions towards those above mediocrity or working towards it demonstrate this. Look at the general public's perception of a large corporation, a successful entrepreneur or businessman. It is usually hate. The more successful a group or person is, the more the general public will ascribe success to luck, being born with a silver spoon, connections, corruption etc. After all, if they did not ascribe these attributes to those that succeed, they would realize they could do the same if they were not lazy. And their identity will not allow themselves to realize this.

     

    The ultimate culmination of this as a thought pattern for society is socialism. In a Scandinavian country or Iceland, in most social circles any story that makes you out to be more successful than others can get you shunned or at least is a social faux-pas.

     

    So while individuals do not crave mediocrity, the group sure does!
    15 Nov 2013, 07:08 PM Reply Like
  • Flynn I attribute your comment more to just plain jealousy then craving mediocrity but potato potata I suppose.
    15 Nov 2013, 08:19 PM Reply Like
  • Davin: I like your interpretation of the message in Atlas Shrugged. I just finished it. I wish I'd read it 50 years ago.
    20 Nov 2013, 11:00 PM Reply Like
  • McD an oasis in the desert. An abomination in any other environment. Oldsters in FL use it like a Starbucks. What the hay.
    17 Nov 2013, 04:52 PM Reply Like
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