The Daily Dose: A Mouthful From McDonald's

 | Apr 23, 2014 | 10:00 AM EDT  | Comments
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For certain, you can learn more about life and financial planning from a McDonald's (MCD) earnings conference call than you can from any at Apple (AAPL), Facebook (FB), Netflix (NFLX) or Amazon (AMZN). Consider this blunt rundown:

Apple: How many low-income families do you think are continuously consumed with the universe of Apple products and eagerly awaiting new arrivals? I'll tell you: not many.

Facebook: Mobile advertising costs are under pressure. Enough said.

Amazon: When the average family is planning its monthly budget, "Amazon-related expenditures" is a line item that's fairly unlikely.

I am not saying those companies fail to offer valuable clues on what's moving and shaking across Mother Earth. They do. But the insights gleaned here are not the same as what you can learn from a company like McDonald's. As a reminder, I've been negative on McDonald's stock, and I've become even more negative following the latest earnings report and confusing earnings call. Nonetheless, the company still offers important macroeconomic takeaways that I can apply to other companies I track.

• China same-store sales were up 6.6% in the quarter -- slower than the country's gross domestic product growth. I would have liked to see that number come in higher, given the country's inflation rate. All in all, this is a negative tidbit for McDonald's.

• Menu-price increases are ranging between 2% to 4% globally, mirroring those announced by former sibling Chipotle (CMG) last week. I'm really beginning to worry that inflation will be passed through to consumers who are ill-equipped to handle it.

• McDonald's sounded as if it's preparing a full-fledged defense of its financially lucrative breakfast daypart. Yum! Brands (YUM) has created a breakfast war, and McDonald's new U.S. chief marketing officer, Deborah Wahl, is likely to respond aggressively very soon.

• McDonald's is installing new assembly prep tables at its restaurants in order to better customize customer orders. I expect new sandwich toppers to be marketed later in 2014.

Various Tidbits

• Burger King (BKW) is on the up and up.

• Simon Property Group's (SPG) guidance raise caught me off-guard, but it did reaffirm my suspicions that retail sales have been surprisingly strong in the past few weeks with the return of warmer weather.

One-quarter of Europe's gas comes from Russia, and half of that passes through Ukraine. This is of particular interest right now, as gas prices in the U.S. and the U.K. have begun to head higher ahead of the peak demand season.

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