Will McDonald’s Record An Increase In the Top line For 2019?

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Yes, as per Trefis estimations, McDonald’s (NYSE: MCD) top line is expected to have a small increase of 0.5% and post revenue at around $21.1 billion for 2019. The company generates its revenue primarily from its US Market which is projected to account for 37% of total revenues in 2019, while the International Lead Markets are expected to contribute 36% to the top line. In this note we discuss the revenue segments of McDonald’s, their historical performance, and expected Total Revenue for 2019 and 2020. You can look at our interactive dashboard analysis ~ McDonald’s Revenues: How does McDonald’s make money? ~ for more details.

McDonald’s Business Model:

What Does McDonald’s offer?

  • The Company operates and franchises McDonald’s restaurants, which serve a locally-relevant menu of quality food and beverages in more than 100 countries. McDonald’s franchised restaurants are owned and operated under one of the following structures – conventional franchise, developmental license, or affiliate.

Operating Segments:

  • U.S.: The Company’s first and largest segment. It covers all the company owned and franchised restaurants across the country.
  • International Lead Markets: The segment includes established markets like Australia, Canada, France, Germany, the U.K., and related markets.
  • High Growth Markets: The segment includes markets that the Company believes have relatively higher restaurant expansion and franchising potential including China, Italy, Korea, the Netherlands, Poland, Russia, Spain, Switzerland, and related markets.
  • Foundation Markets & Corporate: The segment includes the remaining markets in the McDonald’s system, most of which operate under a largely franchised model. Corporate activities are also reported within this segment.

What Are The Alternatives?

  • Major competitors are companies like Burger King, KFC, Subway, and other fast food chains.

What Is The Basis of Competition?

  • McDonald’s restaurants compete with international, national, regional, and local retailers of food products. The Company competes on the basis of price, convenience, service, menu variety, and product quality in a highly fragmented global restaurant industry. The company is far ahead of competitors in terms of Top line – For details please visit our interactive dashboard – McDonald’s Revenues.

 

Revenue growth expected in 2019 and 2020 is primarily from improvement in the US Market and International Lead Markets. For detailed information regarding change in Company owned and Franchise stores as per Market, please visit our interactive dashboard – McDonald’s Revenues.

  • McDonald’s Total Revenue has fallen from $24.6 billion in 2016 to $21 billion in 2018, and is expected to grow to around $21.7 billion in 2 years.
  • McD’s US Revenue has fallen by 7.1% from $8.3 billion in 2016 to $7.7 billion in 2018, and is expected to recover by 4.8% to around $8 billion in 2020.
  • International Lead Market’s Revenue has improved by 5.2% from $7.2 billion in 2016 to $7.6 billion in 2018, and is expected to increase further by 2.2% to around $7.8 billion in 2020.
  • High Growth Market’s Revenue fell by 35.3% from $6.2 billion in 2016 to $4 billion in 2018, and is expected to recover by 2.5% to around $4.1 billion in 2020.
  • Foundation Market’s Revenue fell by 40.7% from $3 billion in 2016 to $1.8 billion in 2018, and is expected to remain nearly flat at around $1.8 billion in 2020.

 

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