Tomorrow afternoon, Starbucks (NASDAQ: SBUX) will be joining the earnings parade when it reports its second quarter numbers.

The last time that the company reported earnings was on January 30, when the company beat analyst expectations by a penny, posting 29 cents a share. But that was still not enough to get buyers enthusiastic about the stock.

Shares have fallen around 13% since then. This time around, analysts are looking for the company to show earnings of 15 cents a share.

McDonald's Corp. (NYSE: MCD) continues to amaze investors.

The home of the Quarter Pounder today reported net income of $946.1 million, or 81 cents a share, compared with $762.4 million, or 62 cents, a year earlier, according to the earnings press release. Revenue increased to $5.61 billion. Wall Street analysts were expected profit of 70 cents on revenue of $5.44 billion.

Gains outside the U.S. helped off-set the weak performance of its domestic business

"For the quarter, Europe and Asia/Pacific, Middle East and Africa both delivered double-digit revenue and operating income growth," the company said. "Europe's revenues rose 23% (11% in constant currencies) during the quarter to nearly $2.4 billion, fueled by an 11.1% comparable sales increase – the highest in the segment's history."

Meanwhile, the U.S. business saw comparable sales rise 2.9% and operating income jump 5.9%. Weak consumer spending is hurting the chain, though, as March comparable sales were negative. The Illinois company, however, expects sales to rebound in April to a 2% to 2.5% gain.

Let's not forget about the coffee strategy, AKA "The Starbucks (NASDAQ: SBUX) Killer." That's been a strong driver for breakfast traffic and should continue to do so for some time.

"Over the next 12 to 18 months, we're going to see coffee as a catalyst for sales," Thrivent Asset Management analyst Chris Scheurer told Bloomberg News.

This underscores why now is a good time for the great taste of McDonald's.

How is McDonald's Corporation (NYSE: MCD) holding up during the economic downturn?

The largest restaurant chain is expected to report profit of 70 cents per share on revenue of $5.4 billion, according to Thomson Financial. Their average price target for the company's stock is $62.64, above the $58.64 where it recently traded. Shares of the company are up about 20% as investors bet that the cost-conscious consumers would be attracted to cheap McDonald's food. Moreover, the company's cut rate, but delicious coffee continues to give Starbucks Corporation (NASDAQ: SBUX) nightmares. This seems to be a recipe for success boosting comparable same-store sales by 11.7% in February.

McDonald's earnings will be a clear sign of how the consumer is holding up. Many are cutting back on dining out as evidenced by the decline in same-store sales at restaurants at diverse as Ruth's Chris Steak House Inc. (NASDAQ: RUTH) to Darden Restaurants Inc's. (NYSE: DRI) Red Lobster.

But thankfully for shareholders, McDonald's isn't solely reliant on its U.S. business. During the fourth quarter, sales rose by double digits outside its home country. The company should see strong sales group in Europe and emerging markets, according to a Lehman Brothers note quoted by the Associated Press.

Despite the fact that Ruby Tuesday Incoroprated (NYSE: RT) serves up a mean burger, consumers continue to sit at home digesting more and more negative economic news. The company recently released third quarter (3Q) 2008 earnings that take away the appetite. 3Q 2008 net income was $11.7 million or $0.23 EPS, compared to 3Q 2007 net income of $28.7 million or $0.49 EPS. Same location sales declined 12-13%. Company expansion was flat with 6 new locations replacing 6 closed locations.

To be fair, some of the decline in customer traffic was due to a company-wide remodel of many locations. The company spent $25 million in 3Q updating its facilities and its menu, with plans to double that amount in the coming year in order to help Ruby Tuesday stand out from its bar and grill competition. Let's hope the remodel woos customers back into its restaurants. The company is renegotiating its existing debt covenants, and controlling advertising expenditures and other costs. CEO Sandy Beall hopes these initiatives will "set the stage for future profits."

FY 2008 guidance is not encouraging. The company expects sales to continue to decline 9-10%, leading to diluted EPS in the $0.40-$0.50 range. The stock jumped 5% on Thursday when 3Q earnings per share (EPS) beat estimates by $0.05, but has since dropped off 2% to trade at just around $8 per share.

Four well known CEOs weighed in on CNBC's Squawk Box, giving their particular insight on economic conditions one day after the Federal Reserve made yet another basis rate cut. Each of the four Chief Executives acknowledged the tough going in the economy, yet each also sought to inject a thread of optimistic patience into their commentary.

Mike Jackson, CEO, Auto Nation Inc. (NYSE: AN), came to the defense of Reserve Board Chair Ben Bernanke. While admitting that the chairman may have crawled blindly into what is now mostly economic turmoil, Jackson stated: "...I think he absolutely has it right now. He's got to be on full flight recession mode, and we'll worry about the dollar, and commodities and inflation later." Personally, I think Benanke should be making moves to protect the consumers and their dollars first, and let inflation take care of itself until the consumer sector is back up to speed.

Wilbur Ross, CEO, W L Ross & Co. Played the most obtuse card stating: "My own opinion is that it's just more of the same volatility." More of the same volatility? Yeah the economy is volatile ... DUH!

Carrols Restaurant Group (NASDAQ: TAST) owns a number of Burger King, Pollo Tropical and Taco Cabana restaurants. Unlike many restaurant chains, Carrols posted a profit in both 4Q and FY2007, based in large measure on same store sales increases of 4.6% in its Hispanic Brands restaurants. The company posted these gains despite rising commodity and labor costs and a weakening Florida economy where many of its Hispanic Brands restaurants are located.

4Q revenues increased 4.5% overall, driven by revenue increases of 5.6% in its Hispanic Brands locations. FY2007 revenues increased 5.1% to $789.4 million driven by the same factor. This was enough to generate a $2 million increase in net income to $15.1 million or EPS of $0.70. CEO Alan Vituli anticipates 2008 revenue growth at 5-6%, which translates into diluted EPS in the 70 to 75 cents range. The company has kept expenses under tight control in order to use cash generated to open 17-23 new locations in 2008.

It's not a fancy business, but the stock currently trades at $7.50 and may be worth a look for investors who want to get a piece of action on a budget.

There is a lot of talk swirling around Wall Street about the current economic slowdown, and just how hard it is going to hit businesses in the months ahead. But so for fast food giant McDonald's (NYSE: MCD), 2008 is looking pretty rosy.

After ending 2007 with a disappointing decline in same store sales, McDonald's has now shown two straight months of sales growth following today's announcement that it had a pretty impressive 11.7% jump in same-store sales during the month of February.

Its American sales saw an increase of 8.3%, while-same stores sales in Europe really took off, showing a jump of an amazing 15.4%. Last month, the company reported that January same-store sales rose by 5.7%.

Wendy's (NYSE: WEN) handling of its review of strategic alternatives has been very strange from a PR perspective. Back in June, the company earned a place on TheStreet.com's "5 Dumbest Things on Wall Street" for its slew of press releases announcing that the company was for sale: "Under its latest effort to win over Wall Street, the company has taken to announcing once a month that it's up for sale."

With its stock down about 40%, no buyer has yet emerged for the company. Today Wendy's announced that the "Special Committee of its Board of Directors, which is reviewing the Company's strategic options, believes that it is in the final stages of its review process."

That's right: a press release saying nothing except that they're almost done with their review -- What does that even mean? 2 more days? 2 more months? They don't say but they caution investors that "there is no assurance that the process will result in any changes to the Company's current plans or when a specific announcement may be made."

The press release added: "The review process being undertaken by the Special Committee has taken longer than anticipated, primarily due to the continuing turmoil in the financial markets."

What goes unsaid is that the stock's sharp decline in value would seemingly make it more attractive as an acquisition.

But with the stock down more than 7% today, it doesn't look like investors are betting on that.

TheStreet.com's Jim Cramer says that next to the consumer, this is the biggest problem facing the otherwise strong companies in this sector.

Doesn't it seem like another day where it is impossible to make money? We have earnings season without any sense that anybody's numbers can be raised. We have an ennui that comes from months of pounding and indecision, and we have stocks that can't seem to go up to save their lives.

Take retail and restaurants. Yet you can't help but wonder whether a Darden (NYSE: DRI) (Cramer's Take) or a Brinker (NYSE: EAT) (Cramer's Take) or a Coach (NYSE: COH) (Cramer's Take) or a Limited (NYSE: LTD) (Cramer's Take) can come back. You can't help but wonder if there's not an Urban Outfitters (NASDAQ: URBN) (Cramer's Take) out there that can turn around or a TJX (NYSE: TJX) (Cramer's Take) that can suddenly hold its own and start rising.

Having become a major force in computers, phones, and music, Apple (NASDAQ: AAPL) CEO Steve Jobs is looking to revolutionize yet another industry: food services.

The Cupertino, California company has filed a patent describing a wireless system that would allow consumers to place an order with a store using a cell phone or other wireless device. Then, the customer would be pinged when the order is ready, thereby avoiding, according to the application, "annoying wait in a long queue if the purchaser arrives before completion of the order."

Continued innovation will be an absolute necessity if Apple shareholders are to see strong returns. At more than 50 times earnings, Apple needs a strong product pipeline to drive future growth.

This device sounds pretty cool, although it isn't yet clear how Apple would monetize it. It seems likely that cafes like Starbucks (NASDAQ: SBUX) would license the technology to allow their customers to order from their cell phones.

Speaking of Apple, BloggingStocks contributor Georges Yared thinks the stock is going to $300.

A fund affiliated with restaurant super-investor Nelson Peltz has acquired a 14% stake in Cheesecake Factory (NASDAQ: CAKE), sending shares of the dining chain up 10% on Wednesday.

The company said that it "has had a preliminary conversation with Triarc (Pelz's firm) already, and looks forward to continuing that dialogue."

According (subscription required) to the Wall Street Journal, "Mr. Peltz has bought stakes in several other restaurant and food companies, including Wendy's International Inc.(NYSE: WEN) and H.J. Heinz Co (NYSE: HNZ). At those companies, he has pressed directors and executives to sell brands, increase marketing or otherwise change their strategies in an effort to raise their stock prices. Mr. Peltz has said he prefers to work with existing management to effect change, though in the past his involvement has prompted reshuffling of company management and boards."

Cheesecake Factory has struggled to provide investors with strong returns over the past few years, and was scraping a multi-year low before the Petlz announcement sent the stock up.

McDonald's Corp. (NYSE: MCD) again has proven that Wall Street's most optimistic forecasts are too conservative.

The number one restaurant chain today reported an 8.2% rise in November sales, a 4.4% gain in U.S. same store sales, a 10.8% increase in Europe and a 12% jump in Asia/Pacific, Middle East and Africa. Shares of the home of the Quarter Pounder, up about 40% this year, rose to a 52-week high over $61 this morning.

One big reason for the company's success is coffee. The Oakbrook, Illinois-based company's promotion that lets consumers get any sized coffee for 69 cents is brilliant because it hits Starbucks Corp. (NASDAQ: SBUX) at its most vulnerable point: price.

More than three weeks after its earnings release, fast-food giant McDonald's (NYSE: MCD) is presenting a financial update to analysts later today. International sales have remained strong for the Dow component and a value menu has kept consumers in McDonald's seats even amid economic tightening. Two of the popular items on the low-price menu are a "snack wrap" for $1.49 and a sundae for $1.00. But commodities prices are on the rise, crimping food producers and restaurateurs.

To keep its growth pace fleet of foot in light of various challenges, McDonald's is taking a liquid focus. In recent years, the company has gained ground on Starbucks (NASDAQ: SBUX), even winning a taste test with its drip coffee last year. Now the behemoth of the Big Mac is exploring the option of moving further into the gourmet-coffee arena, offering beverages such as iced mochas, caramel lattes, and other espresso-based drinks.

Current experimental pricing has these new drinks at $3.00 a pop, which is cheaper than Starbucks but on par with (or slightly higher than) a full-sized burger or sandwich. While consumers are used to emerging from Starbucks five dollars lighter, can they justify spending more on the empty calories of a sweetened coffee drink than the (basically empty, but still protein-filled) calories of a quarter pounder?

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

It's a bad sign for restaurants: they're handing out coupons in an effort to lure reticent diners, who are nervous about gas prices, the economy and, of course, housing.

According to the USA Today, Ruby Tuesday is offering $5 off two dinner entrees, IHOP (NYSE: IHP) franchisees are handing out two-for-one coupons, Darden's (NYSE: DRI) Smoky Bones is giving diners $5 off $15 orders, and
T.G.I. Friday's is giving $5 "Bonus Bites" to those who purchase $25 gift cards.

So what's an investor to do? High gas prices and housing woes are most likely to weigh on the minds of middle-class consumers -- a wealthier diner probably isn't going to let his restaurant plans be interrupted by transportation costs.

Cheescake Factory (NASDAQ: CAKE) has seen its share prices slide as traffic growth has slowed. The company has scaled back its expansion plans and is using the extra cash to repurchase stock. Higher dairy prices have affected gross margins but, long-term, there's a lot to like here. The company has a strong brand, lots of room for expansion, and a much higher average check than a lot of the fast casual chains that are struggling.

A mall operator's efforts to prevent the chain from opening in a competitor's location underscores the company's strength: Cheesecake Factory is a destination in a way that lesser chains like Applebee's and Friday's aren't.

I've had a couple of brushes with fame in my day, and my track record isn't the greatest. I met River Phoenix in April 1991, about 2 1/2 years before his drug-related death at the age of 23 (I love the people who ask me if I got to meet him "while he was still alive." Ummm.) I also knew Ben Curtis (the spokesman, not the golfer). As an elementary-school-age boy, the once-and-future face of Dell (NASDAQ: DELL) was a peripheral friend of my brother and the son of my French teacher.

As I said, my celebrity encounters haven't enjoyed particular longevity. While Curtis isn't overdosing outside the Viper Room, he has been part of the wait staff at Tortilla Flats, a Manhattan bar at Washington and 12th, for the past 18 months. Last week, for Halloween, he dressed up as his former alter-ego, Steve the squirrelly "Dude, you're getting a Dell" kid. He says he gets recognized every day, but appreciated a job at which he can always be himself. And if you ask nicely, he may just repeat his famous catchphrase while he delivers your margarita.