How Can McDonald's Continue to Grow?

Your next video will start in

Recommended Videos

  • Info

  • Comments


Oct. 18 (Bloomberg) -- In today's Triple Threat, Bloomberg's Alix Steel, Piper Jaffray's Nicole Miller Regan and Stutland Volatility Group's Joe Tigay discuss the outlook for McDonald's. They speak with Trish Regan on Bloomberg Television's "Street Smart." (Source: Bloomberg)

Get your orders in fast, because mcdonald's reports on monday before the opening bell.

While the chain stock is essentially frying its competitors for now, mcdonald's has been working hard to keep them at bay.

The company has been pushing for the dollar menu to draw in a wide array of customers.

It is offering more healthy options on the menu, like the recently rolled out chicken wraps and a white sandwiches.

Mcdonald's plans to open about 1500 new stores this year, mostly in japan and latin america.

Investors and customers keep on loving mcdonald's this quarter, so to speak.

We went to ask our panel.

Alix, what is mcdonald's biggest problem right now?

How is it going to keep growing?

There's not that much low hanging fruit (the company earnings -- fruit.

August sales did have a bump, mostly from europe.

The trend has been lower.

Reports for this quarter are not that great.

There has been a mixed consumer response to these mighty wings that were rolled out in september.

Goldman sachs recently conducted a survey of 2000 customers and counseling disturbing, that mcdonald's is a restaurant customers least likely to recommend to their friends and family.

It is the brand their the most familiar with.

That raises some questions about how they will continue attracting customers.

They are pushing the dollar menu.

This is an area of potential strength, as they see it or it is that the right strategy for them if customers are seeing it as low-end?

It's the right strategy to at least have stability.

In this third-quarter earnings report, we have seen a wide variety of responses to those who can hold their own to those who can truly grow.

We look at mcdonald's as steady as she goes, holding her own.

This is one piece of that puzzle.

We might say the healthy menu is designed to bring in some more affluent customers.

Would you go to mcdonald's, you're not thinking healthy.

What you're thinking is value.

Overall, the value menu for these types of restaurants represents 12% to 16% of their sales.

But you cannot make a lot of money on a dollar menu.

The margins are tough.

Let's talk about expansion.

They're expanding in asia and japan, latin america.

Is this a new opportunity for them to grow revenues?

It's a new opportunity, but it does not move the needle.

What are you expecting on monday?

We are looking for flattish.

Pick your region.

Just looking for them to hold their own in terms of market share.

If you look at the first two months of the quarter they reported, they are losing that gap.

That has not happened in quite some time.

What are you thinking on this stock?

I completely agree with nicole.

Consumer discretionary names such as walmart have really underperformed this year.

I see no reason for that not to continue for this year.

For 2014, i am loving mcdonald's prospects for growth.

The reason consumer stock has lagged is because of tighter margins and weaker gdp growth.

That will pick up next year.

I'm looking to do a calendar call spread on monday.

It is a spread trade in which you would buy an option one month and sell an option at the same strike in another month.

I'm looking to sell the december, 97 and a half strike, by the march 97 and a half strike.

What i'm looking for is a small move up after earnings, and really looking for the growth in 2014 where i think the stock can regain $100 a share.

You mentioned weaker gdp growth is hurting mcdonald's. one might think of this as a trade down stock.

Weaker gdp growth in some respects should probably help a company like mcdonald's. what he is saying is interesting, but we are just looking for stocks that go up.

People say it is a place to hide out.

If you look at, just how for the

This text has been automatically generated. It may not be 100% accurate.


BTV Channel Finder


ZIP is required for U.S. locations

Bloomberg Television in   change