A McDonald's (MCD) is Coming to a Corner Near You
NEW YORK ( TheStreet) -- Prepare to see more Golden Arches aglow as McDonald's
The fast-food joint said it will also add a third drive-thru window in refurbished and new stores in an attempt to curb slow service and reduce customer complaints. Executives admitted service had slowed at U.S.-based restaurants after new menu additions, such as the Egg White Delight McMuffin in June, were rolled out too fast, confusing the workflow.
"The pace of product introduction in my opinion [was] too fast," said President Jeff Stratton during the meeting. "In retrospect, I would have taken more time on that."
The Big Mac maker also reaffirmed its annual target of 3% to 5% system-wide sales growth and operating income growth in the range of 6% to 7%. The company expects commodity costs to increase by at least 4.5% in the U.S. and 2.5% in Europe.
"We are focused on those things within our control -- evolving to meet changing consumer preferences, investing to build demand, and maintaining our focus on execution and operations excellence," said CEO Don Thompson in a statement.
McDonald's has suffered from slowing sales and growth in recent months, as competitors, such as Chipotle
In the third quarter, the Oak Brook, Ill.-based company reported net income of $1.52 a share, beating Thomson Reuters estimates by a penny. Revenue failed to make the cut, however, up 2% year over year to $7.32 billion, but shy of consensus $7.34 billion. Comparable sales rose 0.9%.
Despite slowed growth, Real Money contributor David Katz advises not to discount the Golden Arches.
"Outside of the short-term frustrations and its recent slow business progress, we think that MCD is poised for better business trends in the upcoming year. The company continues to gain market share," he wrote in his column.
By midday, McDonald's shares had shed 1% to $96.57. Year to date, the hamburger chain has risen 9.5%, trailing the S&P 500 's 25.69% gains.
TheStreet Ratings team rates McDonald's Corp as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about its recommendation:
"We rate McDonald's Corp (MCD) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, expanding profit margins, good cash flow from operations and increase in stock price during the past year. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."