September 4, 2015

Why Launch Breakfast Now?

Many McDonald's Operators are wondering if, operation -
ally, it would have been a better plan to launch breakfast all day in January instead of launching at the beginning of one of busiest periods of the year.

There is an explanation - Oak Brook management needs good news NOW - and can't wait for next year.

Launching in early October gives them something new to talk about on the October 22nd conference call with Wall Street analysts. That will then carry them through their Oak Brook  meeting with analysts in November. Then things go quiet until the January 21st conference call discussing Q4 2015 with analysts.

During the first weeks of October analysts and reporters will wander through McDonald's restaurants observing people eating breakfast at all hours. Of course many of the menu 
items being consumed will be obtained for free by way of coupons (print or digital) paid for
by McDonald's Operators. MCD watchers won't know that and will be impressed with 
what they see.

So there will be something exciting to discuss on the late October call and chances are good 
that results for the fourth quarter will please shareholders when announced in January because:

* The massive amount of advertising against breakfast.

* National and local couponing discounting efforts.

* Sales in the USA went negative in the fourth quarter of 2013 so there's a good chance that  
"lapping" these two years of soft sales will produce some positive results for Q4 2015.

The more sophisticated analysts will understand this lapping but some won't and reporters definitely won't write about it so in late January there may be headlines proclaiming that  McDonald's USA has been "turned around".

And, since Oak Brook no longer releases monthly sales results this perception could give management cover through the spring conference calls and the 2015 shareholders meeting.

As the T-shirt says, "The time is now" - no matter what happens in the restaurants.

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2 comments:

Anonymous said...

Oakbrook may look good but I bet my P & L won't !!!

Anonymous said...

This is one of those things that could be the more we sell the worse our operation gets and the more people we turn off long term. OB gets their short term hit corp people sell a lot of their stock and o/os get blamed for slow service.