McDonald’s earnings fall short, hurt by European lockdowns, but sees this year’s sales topping 2019

McDonald’s is expected to report its fourth-quarter earnings before the bell on Thursday.

Here’s what Wall Street analysts surveyed by Refinitiv are expecting:

• Earnings per share: $1.78 expected
• Revenue: $5.37 billion expected

In November, the company told investors that it’s targeting mid-single-digit sales growth in 2021 and 2022. The fast-food giant is leaning into meat substitutes and chicken, leveraging more celebrity collaborations and starting a loyalty program in the U.S. to fuel growth as the impacts of the coronavirus pandemic linger.

But investors will likely be interested in the company’s more near-term predictions. Vaccine distribution, extended lockdowns in Europe and new government policies under President Joe Biden could have a significant impact on their results this year.

Still, compared to the broader U.S. restaurant industry, McDonald’s and its fellow fast-food chains have bounced back from the pandemic quickly. Convenient drive-thru lanes, low prices and a menu chockfull of comfort food have brought customers back to its restaurants. Last quarter, McDonald’s reported 4.6% same-store sales growth in its home market, although sales outside of the U.S. are facing more pressure.

But the speedy U.S. sales recovery hasn’t stopped McDonald’s management and franchisees from feuding. Operators’ grievances with the company include asking franchisees to pay higher fees for tech investments and ending a subsidy for Happy Meals that has existed for decades. As part of their revolt, franchisees plan to push back against any future value promotions and revisit those already decided for 2021. Operators have also ceased any “non-essential” communication with the company.

Shares of McDonald’s are about flat over the last year, giving it a market value of $161 billion.

This story is developing. Please check back for updates.