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Yahoo
3 days ago
- Business
- Yahoo
MCD vs. YUM: Which Restaurant Stock is Better Positioned Now?
McDonald's Corporation MCD and Yum! Brands, Inc. YUM are two global powerhouses in the quick-service restaurant industry. Both companies operate extensive international networks and primarily use a franchised business model. In recent years, both McDonald's and Yum! Brands have prioritized digital innovation and global expansion as key strategies to drive growth and enhance customer broader restaurant industry continues to gain from higher menu pricing, average check growth and aggressive expansion. Both companies are also seeing positive momentum from strategic partnerships with third-party delivery services and ongoing digital said, there are a few challenges that affect the companies. Elevated labor costs and persistent food inflation are squeezing margins. Additionally, inflation-driven menu price hikes are beginning to impact customer traffic in certain the current mix of industry tailwinds and headwinds, which stock, McDonald's or Yum! Brands, offers the better value for investors today? Let us take a closer look to find out. The company's strong record of innovation, leadership and adaptability continues to position it for success, even amid challenging market conditions. McDonald's is the world's largest chain of fast-food restaurants, with a presence in more than 100 countries. Its offerings have reached the billion-dollar brand status through sustained product innovation and geographic company is also focusing on expansion efforts. McDonald's plans to open 2,200 restaurants globally in 2025. McDonald's expects to open 600 restaurants in the United States and international operated markets. MCD also plans to open more than 1,600 restaurants in the International Developmental Licensed segment, including 1,000 in China. It aims to open 50,000 restaurants by is focused on menu innovation to drive growth, emphasizing its core billion-dollar brands and expanding affordable offerings. In 2025, it launched the McValue platform in the United States, and introduced everyday affordable price menus and value bundles in key international markets, including Canada. The company also debuted McCrispy Chicken Strips nationwide and is testing new beverages inspired by CosMc's. With McCrispy now in 70 markets and a new chicken item planned for 2026, McDonald's continues to strengthen its global chicken portfolio and value-driven menu since the launch of the loyalty program in the United States, MCD has been able to transform its offerings across drive-thru, takeaway, delivery, curbside pick-up and dine-in. The company has already introduced a loyalty program in more than 60 markets, including the United States, Germany, Canada, the U.K., Australia and increased digital adoption, the company is optimistic about its loyalty members' growth trend. Since the launch of its loyalty program, the total number of 90-day active users has reached more than 170 million. Furthermore, in 2024, the system-wide sales to loyalty members were about $30 billion. It anticipates reaching 90-day active users to 250 million with $45 billion in annual loyalty system-wide sales by the end of 2027. YUM! Brands is gaining traction with its next-generation growth initiatives aimed at capturing evolving consumer preferences. YUM's 'easy operations' pillar is focused on streamlining restaurant operations and empowering team members. In the first quarter 2025, the company extended its Byte Restaurant Coach tool to an additional 5,000 stores. This digital platform supports consistent and scalable performance management through routine tools and training. Meanwhile, Taco Bell U.S. onboarded 1,500 more restaurants to the Byte Back of House platform, raising the total to 3,000 stores. This progress marks a step forward in developing a fully connected kitchen ecosystem aimed at enhancing efficiency and enabling data-driven operational decisions. YUM plans for full system-wide adoption in Brands reported steady progress in global development in the first quarter, with 751 store openings across 68 countries. KFC led the development effort, opening 528 units — the second-highest first-quarter total in the brand's history — driven by strong performance in key markets such as China, India, Japan and Thailand. With a global average payback period of less than five years, and even more attractive returns in China, Thailand and the Middle East, KFC continues to be a cornerstone of YUM's expansion Pizza Hut added 198 stores in 34 markets, and Taco Bell posted 24 gross openings. Though Taco Bell's net unit growth was affected by strategic closures in Malaysia and China's Tier 2 cities, the brand remains on track to achieve 100 net international openings in 2025, with momentum strongest in the U.K., Spain and company is also gaining from robust comps growth. In the first quarter of 2025, worldwide comps at Yum! Brands increased 3% year over year compared with a 1% rise in the previous quarter. The improvement was fueled by robust growth across multiple international markets, including a 13% comp increase in Korea, 8% in Africa and 6% in Canada, aided by localized innovation and value-led aims to drive comp growth in 2025 through deeper market penetration and an expanded range of offerings like tenders, nuggets, twisters and sandwiches. The Zacks Consensus Estimate for McDonald's 2025 sales and EPS implies year-over-year growth of 1.6% and 4.4%, respectively. Earnings estimates for 2025 have witnessed upward revisions of 0.2% in the past 30 days. Image Source: Zacks Investment Research The Zacks Consensus Estimate for Yum! Brands' 2025 sales implies a year-over-year increase of 6.8% and the same for EPS indicates a gain of 9.7%. Earnings estimates for 2025 have witnessed upward revisions of 0.3% in the past 30 days. Image Source: Zacks Investment Research The MCD stock has gained 7.6% in the year-to-date period compared with the industry and the S&P 500's 0.5% growth and 0.3% decline, respectively. Conversely, YUM shares have risen 7.4% in the same time frame. Image Source: Zacks Investment Research MCD is trading at a forward 12-month price-to-earnings ratio of 24.69X, above its median of 23.72X over the last year. YUM's forward earnings multiple is 22.99X, slightly below its median of 22.68X over the same time frame. Image Source: Zacks Investment Research Yum! Brands appears slightly ahead of McDonald's at the moment due to its stronger expected earnings and sales growth trajectory, driven by aggressive global expansion, faster same-store sales growth across key international markets, and deeper digital integration in operations. While McDonald's remains a solid performer with robust loyalty engagement and expansion plans, YUM's more dynamic international development, broader innovation pipeline and higher earnings momentum suggest that it is currently executing more effectively on growth opportunities. Both YUM and MCD currently carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report McDonald's Corporation (MCD) : Free Stock Analysis Report Yum! Brands, Inc. (YUM) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Fehler beim Abrufen der Daten Melden Sie sich an, um Ihr Portfolio aufzurufen. Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten
Yahoo
23-05-2025
- Business
- Yahoo
The restaurant industry's Q1 2025 winners and losers
This story was originally published on Restaurant Dive. To receive daily news and insights, subscribe to our free daily Restaurant Dive newsletter. Weather and a pullback in consumer spending made Q1 2025 one of the worst quarters for restaurant chains in recent years, with brands like Wendy's, Burger King, Popeyes and Sweetgreen all posting negative same-store sales growth. Companies continued to focus on their value propositions with McDonald's rolling out its much-anticipated McValue menu in January and Chili's increasing advertising for its 3 for Me deal to better compete with QSRs. Most of last quarter's winners were not surprising; Chili's, Cava and Taco Bell continued to outperform their peers. The quarter did reveal some surprises like a rare decline in sales and traffic at Chipotle and an uptick in sales at Noodles & Company following a menu overhaul. Restaurant Dive identified winning and losing brands from publicly traded restaurant firms, based largely on same-store sales performance and the sense of momentum conveyed by earnings calls and analyst research notes. Chili's had another stellar quarter of over 30% same-store sales growth and 21% comparable traffic growth, making it a clear winner in the casual segment and the restaurant industry as a whole. The company attributed its traffic growth to operational improvements and to its advertising strategy, which has largely focused on its value proposition compared to QSR chains by emphasizing the $10.99 starting point of its 3 For Meal deal. One of its recent campaigns spoofed a payday lender to help guests cover the cost of a fast food combo meal. Operational improvements, including a new kitchen display system, helped the chain improve ticket times even as traffic surged dramatically. The KDS allows chefs to easily reference recipes instead of using hundreds of pages of reference finders. It is also upgrading equipment, such as converting to a TurboChef double batch oven from a conveyor belt oven system. Cava was the clear winner among fast casual chains and was one of the few restaurant brands to post double-digit growth during the quarter. Cava's CFO Tricia Tolivar attributed the chain's ongoing traffic and sales success to the appeal of Mediterranean cuisine and the chain's long-term strategy of keeping prices below inflation. Additionally, the chain is seeing a boost in guest engagement after changing its loyalty program to a point-based system in October. Last quarter it added 50,000 members per week, and is now approaching 8 million total members. Analyst TD Cowen believes Cava could outperform the industry this year and is on a path to reach 1,200 units by 2033, given its dominance in the underrepresented Mediterranean category. With a comparable sales increase of 4.4%, Noodles & Company posted its strongest results since Q1 2023, when comps were up over 6%. CEO Drew Madsen credited the company's menu refresh and an increase in marketing for the boost. The chain rolled out nine new and refreshed items in March several months after it added three dishes in October, as part of a turnaround strategy. A significant push in marketing, including redefining its brand strategy, emphasizing its expertise with noodles, and creating new activations across multiple media channels helped boost brand awareness, as well. The Mexican fast food chain continued to outperform its peers with a 9% increase in same-stores sales during the quarter, one percentage point higher than previous expectations. The chain, which had $2.2 million average unit volumes last year, is targeting an AUV of $3 million as part of the Relentlessly Innovative Next-Generation Growth plan it shared during the first quarter. One way Taco Bell stayed ahead of its peers was through ongoing menu innovation and LTOs, including Crispy Chicken Nuggets, Milk Bar Churros, Cheesy Dipping Burritos and Steak and Queso Crunchwrap Sliders, all of which helped boost sales. The expansion of its Luxe Cravings Box, with the addition of $5 and $9 price points, helped bring in low-income consumers. Dutch Bros posted strong system same-shop sales of 4.7% and transactions of 1.3% during the quarter, maintaining its momentum over its closest public company competitor Starbucks, which continues to suffer a sales and traffic slump. Dutch Bros' company-owned same-store sales and transactions rose higher than the system average with an increase of 6.9% and 3.7%, respectively, according to an earnings release. About 72% of its system transactions came through its loyalty program, a five-point improvement compared to the same period last year, Christine Barone, Dutch Bros CEO, said during the chain's earnings call. Its mobile order ahead channel, which launched in 2024, represented 11% of transaction mix, a three-point improvement from the fourth quarter, she said. In many of its new markets, Order Ahead is seeing transaction penetration rates nearly two times higher than the system average. The coffee chain is also in the midst of testing food to help boost incrementality during the morning and increase frequency. That test was expanded from eight to 32 units as the chain works toward a broader test and eventual rollout in 2026. During the first quarter, the chain also surpassed 1,000 units, reaching 1,012 units compared to 876 in the year-ago quarter, according to an earnings release. It is now on a path to reach 2,029 units by 2029 and said its total addressable market is over 7,000 potential units compared to a previous estimate of 4,000 units. McDonald's saw a pullback not just among low-income households, but also middle-income families during the quarter, contributing to a 3.6% decline in same-store sales in the U.S. This decrease also marked the chain's steepest decline in same-store sales since Q2 2020, when it declined 8.7%. While traffic and sales were anemic last quarter, the chain could move into the winners column later this year as the impact of its value menu takes hold — it was only released in January — and as its sees traffic boosts from popular promotions, like its Minecraft Movie deal, and the May launch of McCrispy Chicken Strips. The chain, which has been in the winner category for several quarters, posted a traffic and sales decline amid the consumer spending slowdown. Chipotle could bump back into the winner category later this year as management expects comparable sales growth in the low to mid-single digit range. If economic conditions don't change, however, those projections might be optimistic — negative traffic trends continued into April. The chain has a few tricks up its sleeve that could help drive traffic, like its Chipotle Honey Chicken LTO that launched in March and had a strong start. It also plans to ramp up marketing spend for the summer to help drive guest engagement. All three of the top publicly traded pizza chains posted negative comparable sales during the first quarter, with Domino's breaking its 10-quarter streak of same-store sales growth. Domino's has been growing its third-party delivery channel, adding DoorDash as a provider in April alongside its existing partnership with Uber Eats. The company expects third-party delivery to become a $1 billion business over time. Pizza Hut posted the biggest decline of 5% amid a tough competitive environment. It will continue to lean into product innovation and group occasions after its Stuffed Crust and Wings promotion and Ultimate Hut bundle increased check and brought in new guests. Papa Johns also had a weak quarter, with a 3% decline, despite CEO Todd Penegor's refocus on the chain's core pizza products. The company did sell 4% more pizzas in the quarter, alongside sequential improvement with multiple pizzas since Q1 2024, Penegor said during an earnings call. It also removed underperforming SKUs from its menu and continued to simplify its menu. Given the turnaround strategy has only been in effect since late last year, it could be a matter of time before Papa Johns ends up back in positive comparable traffic and sales. Recommended Reading The restaurant industry's Q4 2024 winners and losers Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
22-05-2025
- Business
- Miami Herald
McDonald's announces major store change to win back customers
It is no secret that McDonald's (MCD) is in a tough battle with weak consumer demand. Ever since the fast-food chain faced controversy last year for hiking its menu prices and suffered an E. coli outbreak in a few of its restaurant locations, consumers have been pulling back. In McDonald's first-quarter earnings report for 2025, it revealed that its U.S. comparable sales decreased by 3.6% year-over-year. Don't miss the move: Subscribe to TheStreet's free daily newsletter Also, according to recent data from foot traffic in McDonald's stores fell by 2.6% during the quarter. Related: McDonald's CEO sounds alarm on major customer problem During an earnings call on May 1, McDonald's CEO Chris Kempczinski said that consumers are cutting their spending on fast food more than previously expected. "We entered 2025 knowing that it would be a challenging time for the QSR industry due to macroeconomic uncertainty and pressures weighing on the consumer," said Kempczinski. "During the first quarter, geopolitical tensions added to the economic uncertainty and dampened consumer sentiment more than we expected." Image source:Amid this alarming consumer trend, McDonald's has been making several bold attempts to attract back customers. In its latest effort, the fast-food chain has announced that it will be extending its hours at restaurant locations nationwide, according to a new report from QSR Magazine. Many McDonald's locations will now be open 24/7, while others will remain open past midnight. This move allows it to compete directly with rivals such as Jack in the Box, Waffle House, and Whataburger, which are open 24 hours. Related: McDonald's announces return of beloved menu item "Our fans know there's no better way to end an unforgettable night than by feasting on your favorite McDonald's order," said McDonald's spokesperson in a statement to QSR. "That's why, as the summer season kicks off, we're excited to offer up more ways for customers to satisfy their late-night cravings with more choices and expanded hours at more restaurants." The change comes shortly after McDonald's announced that it will hire up to 375,000 new employees across the country this summer as it plans to open 900 new U.S. restaurant locations by 2027. Recently, McDonald's has been relying on deals and the return of fan-favorite menu items to boost its struggling sales. Last summer, the fast-food chain launched its $5 Meal Deal, which offers a meal that consists of a McChicken, four-piece chicken nuggets or a McDouble, along with fries and a drink. It then launched the McValue menu earlier this year, which introduced its Buy One, Add One for $1 deal. In this deal, customers can buy a "full-priced" menu item from the McValue menu and purchase one more item of their choice for $1. More Food + Dining: Domino's Pizza unveils generous deal amid alarming consumer trendSteak 'n Shake's beef tallow fries aren't as healthy as they appearThe Cheesecake Factory makes bittersweet changes to its menu According to Kempczinski, the Buy One, Add One for $1 deal hasn't been performing as well as the $5 Meal Deal. "When you look at the Buy One, Add One for $1, I'd say our view on that is it's performing okay, but frankly, it's not driving nearly the amount of incrementality that we're seeing with the buy one or with the $5 Meal Deal," said Kempczinski during the May 1 earnings call. McDonald's also recently hyped the return of its popular Snack Wrap onto menus, which is essentially chicken tenders, lettuce, shredded cheddar cheese, and ranch wrapped in a soft flour tortilla. It was previously discontinued in 2016. The fast-food chain also permanently added McCrispy Strips to its menus earlier this month, which is a revamped version of its discontinued Chicken Selects. In addition, McDonald's announced the return of Happy Meals with Squishmallow toys last week, a menu item with a massive cult following. These will only be available on McDonald's menus nationwide for a limited time. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
CBS News
21-05-2025
- Business
- CBS News
Fast-food isn't so affordable anymore. Here are the U.S. cities where prices are the highest.
Food industry analyst says food prices will rise due to tariffs, "no question about it" Like Subway's $5 footlong, affordable fast-food may soon be a thing of the past. The average price of fast-food in larger U.S. cities is now in the double digits, with the typical meal costing $11.56, according to a new report from LendingTree. Prices are highest in San Francisco, where the average fast-food meal costs $13.88, followed by Seattle at $13.48. Columbus, Ohio, has the most affordable fast-food, but meals still came to $10.01 on average. Fast-food has long been considered a more economical, if not more healthful, way to eat. Whether it's Wendy's "Biggie Bag" or McDonald's "McValue" menu, most major fast-food chains offer some sort of meal deal for under $10. But as costs rise and inflation pinches Americans' wallets, the cost of burgers, fries and chicken nuggets may be slipping out of reach for many consumers. A FinanceBuzz analysis found last year that average fast food prices have risen between 39% and 100% over the last decade. For example, a McDouble sandwich that cost $1.19 in 2014 would easily cost more than $3 in 2024, the personal finance site found. Thirty-nine percent of Americans expect to spend less on dining given heightened uncertainty about the economy, according to a recent Bankrate survey. According to McDonald's most recent earnings report, the company experienced a 3.6% drop in sales the first quarter, with executives citing tariffs as the reason behind the slower foot traffic. "Heightened anxiety" about the economy is weighing on lower- and middle-income Americans, McDonald's CEO Chris Kempczinski said in a May 1 earnings call. Among the consumers who may be struggling with the cost of fast-food — the low-income employees who make it. The average hourly wage for fast-food workers is $15.07, according to LendingTree. That means it takes workers more than two times longer than someone on an average wage in the U.S. to earn enough to afford a typical fast food meal, while factoring in the cost of other living expenses. "No one has ever expected to get rich off of fast-food wages, but the fact that these workers can't even expect a livable wage is troubling," LendingTree chief consumer finance analyst Matt Schulz said in the report. LendingTree found that a fast-food worker who purchased three meals a day from their employer, seven days a week, would end up spending 40% of their salary on average — leaving them with just 60% of their paycheck to live on.
Daily Mail
20-05-2025
- Entertainment
- Daily Mail
McDonald's fans rejoice over return of fan-favorite Happy Meal toy: 'Just left my full-blown adult job to get one'
'Just left my full-blown adult job (on lunch break) to get a Happy Meal.' That's how one fan reacted to the return of Squishmallows toys at McDonald's — a comeback that's sparking a viral frenzy. Back by popular demand, the limited-edition plushies are now available in Happy Meals at McDonald's restaurants nationwide until June 9. Originally released in 2023, the 12 mini Squishmallows were an instant hit. Collectors have taken to TikTok and Instagram to share their excitement, post unboxings, and trade tips on scoring the full set. 'Dinner sorted for the rest of the week — Happy Meals every day,' one Instagram user joked. One fan even wrote, 'Y'all making me buy my fully grown-up girlfriend Happy Meals now because of this!' This year introduces a new cosmic character, Halley the Intergalactic Axolotl, named after Halley's Comet. Each plush comes with a hang tag and digital game code. McDonald's is working to improve its sales and customer satisfaction by extending fan-favorite deals Fans have also been leaving reviews of the toys on TikTok. The hashtag #squishmallows quickly went viral and has been featured in over 680,000 videos. Matt March, known as @thesouthernsnack on the video platform, gave an honest review of the toy after he purchasing a Squishmallows Happy Meal on Tuesday. 'I was gonna give this set a 10, but I think the texture is a bit firm and not as bit not as squishy as a Squishmallow would be, so I'm gonna get this a nine out of 10,' he revealed. Prior to Squishmallows, fans were raving about this year's return of Pokémon cards and toys that came with a Happy Meal promoting 'A Minecraft Movie.' The toy mania couldn't come at a better time for McDonald's. The company is working to bounce back after a tough year. Not only did its highly publicized outbreak leave one customer dead, but it also suffered falling sales over the past year. It hopes to boost sales by extending popular deals from its McValue platform. The $5 Meal Deal has become a huge hit after some initial complaints from customers. Despite the financial difficulties, McDonald's is aiming open 900 restaurants by 2027. The chain also plans to hire 375,000 employees this summer, it's biggest job push since 2020.
