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McDonald's quarterly earnings preview

McDonald's Corp (NYSE: MCD) will be reporting on its fiscal first quarter earnings next Friday the 20. The stock has had a pretty nice run over the last year with shares climbing over 35% since last July. Will this impressive run continue after next week?

If past performance is any indication, there is a strong possibility that McDonald's won't let the market down. It has a great history of meeting or surpassing analyst estimates. The last time that the company was unable to meet estimates was back on January 28, 2005 when it missed by just a penny.

This time around analysts are expecting to see McDonald's report $0.62 per share when it announces its first quarter numbers before the market opens next Friday. For the first quarter last year, the company matched its estimates when it reported $0.49 per share.

There hasn't been a whole lot of news surrounding the fast food giant lately, other than troubles it has run into in China. After being accused of underpaying its employees in the country, China officially cleared the company of any wrongdoing. While it is good news to hear, if you read the fine print of the news release you see that the only reason that the company was cleared is because China does not legally protect the working conditions of working students.

Last week McDonald's announced that it will give unions a bigger presence in its Chinese restaurants, so we can expect to hear a little more on this subject during the conference call next week.

Continue reading McDonald's quarterly earnings preview

Sam's Club vs. Costco: Battle of the Brands

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and watch out for more Battle of the Brands posts.

A portfolio manager once said, "If a nuclear explosion hit my city and I had to pick one place to hole-up for a couple of years until all was calm, I would want to be at a Costco store. It has everything any human being could ever want or need." Well, I don't know if I could spend a couple of years in a Costco store, but no problem with a couple of hours!

Sam's Club, a division of Wal-Mart Stores Inc. (NYSE: WMT) versus Costco Wholesale Corp. (NASDAQ: COST): they have collectively changed the way people shop. The differences are profound between the two, yet conceptually they are very similar. Both "warehouse" concepts sell in bulk fashion. If you're looking for a small jar of Grey Poupon mustard, forget either of these two warehouse stores. But, if you want two side-by-side 16-ounce jars of Grey Poupon, enough to satisfy a football team, then you have come to the right place.

As similar as these two are, the differences do exist. Costco offers tremendous prices to its customers (club members) and quality. Costco has figured out the consumer will come in with a set list of items to be purchased, only to be enticed to expand that list as they walk the store. Strategically placed "special" items, or Costco employees serving out free samples of delicious food and drink items not normally found on the customer's list. It's brilliant marketing: on-site demonstrations and/or sampling of the product. "An impulse purchase" is the expression I have used many, many times as I've explained to my wife why I bought this or that.

Continue reading Sam's Club vs. Costco: Battle of the Brands

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Last updated: May 28, 2012: 08:39 AM

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