If you were hoping for cheaper McDonald's items, here's some bad news:
McDonald’s Corp. probably won’t cut prices on Big Macs and Quarter Pounders as a way to reverse a decline the number of customers coming through the door, but it likely will get money in the hands of shareholders through stock buybacks, analysts say.
“While U.S. traffic remains negative, we see limited risk that McDonald’s resorts to discounting, given its focus on franchisee profits and reinvestment into the brand ,” wrote Jake Bartlett.Chief Financial Officer Kevin Ozan called the effort to turn around the traffic “a top priority in the street fight for market share,” a quote that was a red flag to Bartlett.
“With more traction on its Velocity Growth Plan, McDonald’s seems on track with its target return of $25 billion via stock buybacks and dividends from 2017 to 2019,” wrote Tuna Amobi, in a note.Stifel analysts aren’t worried about the traffic because of the growth in average check.
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