McDonald's investor day will feature possible updates on multiple key topics
The investor update will kick off at 9:39 a.m. Central
McDonald's spinoff restaurant 'CosMc's' to open in Chicago
McDonald’s is set to debut a new spin-off restaurant called "CosMc's" in a Chicago suburb. (Credit: FOX 32)
Many investors will look to McDonald’s on Wednesday as the fast-food chain holds its investor day later in the morning.
The Chicago-based company, helmed by CEO Chris Kempczinski, will begin giving its update to investors at 10:30 a.m. Eastern.
A variety of topics could potentially come up at the event. FOX Business reached out to McDonald’s for comment about key themes it planned to touch on.
Restaurant Openings
The company’s efforts to further boost unit growth will likely be a significant focus, according to analysts. There are currently over 38,000 McDonald’s locations around the world, including about 13,500 in America.
A sign is posted in front of a McDonald's restaurant on April 28, 2022 in San Leandro, California. (Justin Sullivan/Getty Images / Getty Images)
"McDonald’s is expecting to add 3.5%-4.0% net store growth in 2023, a figure that should step up over the next several years as franchisees continue to shift from years of reinvesting in the store image to investing for new development," Guggenheim Securities restaurants analyst Greg Francfort said in a statement to FOX Business.
In a recent research note, Oppenheimer & Co. also identified the topic as a potential "heavy focus" for the event.
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Kempczinski said in October that McDonald’s would give "more details" on its plans related to "Fourth D development."
The "Fourth D" of the company’s Accelerating the Arches initiative is restaurant development. It entails boosting how many locations it opens "to fully capture the increased demand" for the chain’s food, as well as "testing concepts," according to the company.
CosMc's
Kempczinski has previously said the investor day would include McDonald’s supplying more details "about our development plans and new format innovations" like CosMc’s. That, according to the fast food chain’s CEO, will be a "small format concept with all the DNA of McDonald’s but its own unique personality."
MCDONALD'S SPINOFF RESTAURANT ‘COSMC’S' OPENING IN CHICAGO
The company has said 2024 would be when it starts trying out the spinoff "in a small handful of sites in a limited geography." One of those will be in Bolingbrook, Illinois.
An aerial view shot of CosMc's CosMc-3. The fast food giant McDonald’s is set to debut a new spin-off restaurant called "CosMc's" in a Chicago suburb. The venue will likely serve coffee, iced teas, lemonades and slushies. (FOX 32 / Fox News)
Guggenheim will be "watching for any comments on the CosMc’s brand and expansion plans there as it relates to competitive inroads on SBUX and BROS," Francfort said.
Wages
The wages of McDonald’s workers, particularly those in California, could potentially come up after The Golden State recently implemented AB 1228.
Kempczinski told analysts and investors in October that the legislation, which became law in September, would have "a wage impact for our California franchisees" and that "I don’t think at this point, we can’t say exactly how much of that is going to work its way through pricing."
He also indicated he thought McDonald’s was "in a better position than our competitors to weather this," giving the fast-food giant an opportunity to gain share.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| MCD | MCDONALD'S CORP. | 292.44 | -1.80 | -0.61% |
AB 1228 has provisions raising the minimum wage for fast-food workers to $20 per hour and creating a council to set guidelines for wages and make recommendations regarding working conditions. Restaurants with at least 60 locations nationwide that do not make and sell their own bread are subject to it.
Digital Strategies
According to the Oppenheimer research note, efforts geared toward "elevating digital strategies" could come in the spotlight.
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McDonald’s attributed over 40% of the systemwide sales generated by its top six markets in the third quarter to digital sales. That amounted to nearly $9 billion.
Within those markets, it saw over 57 million 90-day active members, the company’s CFO said.
Results of Reorganization & Layoffs
There is the possibility that an update on how the reorganization that McDonald’s has undergone is doing could be shared.
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It started that effort, which involved headcount reductions, began earlier in the year. The goal of the restructuring was to "foster greater collaboration and develop ‘one McDonald’s way’ to solve problems for our customers and people together," according to a January Kempczinski message to the company’s workforce prior to its commencement.
Signage is displayed outside a McDonald's Corp. fast food restaurant in Louisville, Kentucky, on Monday, Jan. 14, 2019. (Photographer: Luke Sharrett/Bloomberg via Getty Images / Getty Images)
2024 & 2025 Outlook
The company may also offer its outlook on certain performance metrics for 2024 and 2025, according to Oppenheimer.
McDonald's Corp
Oppenheimer projected McDonald’s could give "mid-single-digit system-sales growth" and EBIT margins "of high-40s" as part of that forecast. The company may also put forward a "disciplined" General and Administrative plan "at ~2.2% of system-sales," according to the research note.
Eric Revell contributed to this report.