Below is a complimentary Consumables Pro research note written by Hedgeye Consumables analysts Howard Penney and Nick Balch. Click here to learn more and subscribe.
REMOVING MCD FROM THE LONG BIAS LIST
McDonald's (MCD) weekly traffic trends have significantly decelerated since the beginning of August.
McDonald's stock tends to be a favorite in times of concern for the restaurant industry, like rising gas prices and student loan payments. The current bull case for McDonald's is due to a "best" burger innovation, digital initiatives, and value offerings. None of this is helping short-term traffic trends, which are collapsing.
We have concerns about the company's aggressive pricing over the past few years.
We talked more about McDonald's troubling trends on The Call @ Hedgeye today and on Aug. 31.
"Restaurant sales are collapsing," Howard Penney told Keith McCullough this morning. "Traffic is down -7% in Sept. vs. -3.3% in Aug. Rise in oil prices, student loan payments ... Whatever excuse you want to make, it's slowing. McDonald's went from flat traffic the first week of August to -7% this week. There are clearly some issues."
To watch today's replay in full as part of All Access Week, click here.
