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.