The world’s biggest fast-food chain, McDonald’s served up third quarter sales slightly ahead of forecasts and said it would launch various new initiatives to help it gain market share.

Global revenues for the last quarter were down 2% to $5.42 billion, fractionally above market estimates but a major improvement on the 30% plunge of the previous quarter. Its shares ended 1.5% lower on the day (9 Nov) despite the wild gyrations in markets caused by the Pfizer news.

The firm predicted it would return to single-digit growth next year, helped by the launch of a new Crispy Chicken Sandwich which would help it compete with chains such as Popeye’s, and revealed it would debut a new ‘McPlant’ range of plant-based products to take on rival Burger King.

That news sent shares of plant-based food maker Beyond Meat down 8% in early trading, which was compounded after the market close when the firm posted a surprise operating loss for the third quarter on much lower than expected sales. In after-market trading the shares ended down a whopping 29%.

Beyond Meat said its gross margin had fallen from 35.6% to 27% in the third quarter year-on-year as it has been making higher trade discounts as it fights growing competition. Inventory also increased from $81.6 million at the end of 2019 to $132.3 million which either means it is preparing for a big increase in demand or, perhaps more realistically, demand hasn’t been as strong as expected.

Next week sees earnings from Tyson Foods, the world’s biggest producer of beef, pork and poultry, which launched its own plant-based range in 2019.  Fast-food chain Jack in the Box last month unveiled its ‘Unchicken’ sandwiches using Tyson’s pea protein-based product.

Also reporting next week are bellwether retail stocks Home Depot, Target and WalMart.

Bricks and mortar retail stocks have outperformed the S&P 500 this year as they have adapted to the switch to online spending, although none come close to Amazon’s 70% gain year-to-date.

US earnings expectations have shrunk generally with profits for the broad consumer discretionary sector of the S&P forecast to contract by 33% in the third quarter, and the outlook for the crucial fourth quarter isn’t that rosy with a recent Deloitte survey pointing to a 7% fall in holiday spending.

Home Depot, which has cashed in on the demand for home décor during the pandemic, has already started its Black Friday campaign with big reductions across many of its lines.

Target and Walmart, which sell groceries alongside general merchandise, have also started reducing prices to tempt shoppers to buy early, while Walmart continues to take counters off the board, putting its Argentinian business up for sale after completing the disposal of its UK subsidiary Asda.

‹ Previous2020-11-12Next ›