McDonald's (NYSE: MCD) shares fell over 4% on Wednesday morning after the fast-food chain unveiled an $8.5 billion franchisee support plan and long-term growth targets at its investor day. The company plans to provide about $8.5 billion in support to franchisees through 2036, including roughly $5 billion through 2030, through rent relief and capital contributions.
McDonald's (NYSE:MCD | MCD Price Prediction) shares are falling sharply in Wednesday morning trading after the company detailed a multi-year strategy at its Investor Day, headlined by an $8.5 billion franchisee support commitment that runs through 2036.
McDonald's CEO Chris Kempczinski said that he expects that high inflation and flat traffic will continue to weigh on the restaurant industry. "Because I think, as we look out forward, we're not expecting things to change," he said on CNBC's "Squawk on the Street.
Both McDonald's and Starbucks trail the 10-year Treasury yield right now, so picking the wrong one doesn't just mean slower growth. It means betting a retirement portfolio on a payout that might not survive the next decade.
McDonald's is expected to share more details about its latest growth strategy at its investor day in Chicago. The presentation comes as McDonald's U.S. business disappointed in its most recent quarter.
McDonald's Corporation has underperformed, down 18% YTD, despite solid cash flow growth and its 50th consecutive dividend increase. Recent quarters showed slowing traffic, weaker comparable sales, and execution issues, driven by inflation and higher fuel prices impacting consumer demand. MCD's McDonald's > NEXT strategy, disciplined product launches, and plans for 2,600 new stores by 2026 aim to drive future growth as inflation moderates.
McDonald's has achieved Dividend King status with its 50th consecutive annual dividend increase, now offering a 3% yield at a six-year high. MCD trades at its lowest forward multiple in over a decade after a sharp selloff, despite robust margins and growing loyalty-driven sales. Technical and seasonal backtests indicate a strong probability of a 7% gap-fill ROI and historically positive returns in midterm election years.
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