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On Friday, Raymond (NSE:RYMD) James analyst Brian Vaccaro maintained a Market Perform rating for McDonald’s Corporation (NYSE:MCD), following the report of strong March sales from the company’s Japan operations. McDonald’s Japan showcased a 5.1% increase in comparable sales, driven by a 4.8% rise in traffic and a 0.3% growth in average check size. These results contributed to a first-quarter comparable sales increase of 3.5%, with traffic up by 2.6%. The company, a prominent player in the Hotels, Restaurants & Leisure industry with a market capitalization of $222 billion, has demonstrated strong financial health with a 56.8% gross profit margin in the last twelve months.InvestingPro analysis reveals 10+ additional investment insights for McDonald’s, including its dividend consistency and market positioning. Subscribers gain access to comprehensive Pro Research Reports that provide deep-dive analysis of what really matters for informed investment decisions.
The performance in the first quarter of 2025 stands in contrast to the fourth quarter of 2024, which saw comparable sales of 4.2% and traffic growth of 3.3%. The third quarter of 2024 had a 2.2% rise in comparable sales, with traffic at a modest 0.2%. The monthly breakdown for the first quarter of 2025 showed January at 4.3%, February at 0.8%, and March at 4.8%. This performance has contributed to McDonald’s impressive YTD price total return of 10.4%, with the stock currently trading near its 52-week high of $326.32.
The March trends were also robust when viewed over a longer period, with two-year and three-year comparable sales in March at 15.2% and 22.6%, respectively, including traffic increases of 10.5% and 8.7%. These figures are an improvement over the two-year and three-year comparable sales in the fourth quarter of 2024, which were 9.7% and 23.4%, and the third quarter of 2024, which were 10.3% and 16.2%.
McDonald’s Japan attributed its strong performance in March to the launch of a new value campaign, Tokuninarudo, which included discounted offers for medium and large fries, daily digital coupons, and a value-priced hamburger meal starting at 500 JPY, introduced on May 12. Additionally, the company has adjusted its menu prices upwards by 10-30 JPY on certain items to offset rising costs related to energy, logistics, and labor.
As of March 2025, McDonald’s Japan’s comparable sales compared to 2019 were up by 48.2%, reflecting a significant increase in average check by 40.3% and traffic by 5.8%. McDonald’s Japan operates nearly 3,000 units, representing approximately 7% of the global system-wide units and about 16% of McDonald’s International Developmental Licensed (IDL) segment. The company’s global operations have generated $25.9 billion in revenue over the last twelve months, with an impressive return on assets of 14.8%.For detailed financial metrics and exclusive insights, including Fair Value calculations and comprehensive analysis, visit InvestingPro, where you’ll find expert analysis of McDonald’s and 1,400+ other top stocks.
In other recent news, McDonald’s Corporation has announced a significant issuance of $1.5 billion in medium-term notes, with $600 million due in 2030 and $900 million due in 2035. This move is part of the company’s ongoing financial strategy to manage its capital structure and support corporate activities. Additionally, McDonald’s has revised its executive compensation plan to align incentives with company performance, focusing on operating income and Systemwide sales as key metrics. The new plan includes components based on new restaurant openings and strategic leadership efforts.
In another development, McDonald’s has undergone an executive leadership reshuffle, with Gillian McDonald transitioning to the role of Executive Vice President – Global Chief Restaurant Experience Officer, and Manuel JM Steijaert stepping in as Executive Vice President – President, International Operated Markets. Analyst firms have also shown optimism towards McDonald’s future. KeyBanc Capital Markets increased its price target for the company to $340, maintaining an Overweight rating, while Erste Group upgraded the stock from Hold to Buy, citing the company’s stable operating margin and growth potential. These recent developments reflect McDonald’s strategic focus on enhancing its financial health and maintaining competitive strength in the fast-food industry.
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