McDonald’s earnings came out better than expected on Tuesday morning. The fast food restaurant chain printed 2.55 EPS, bigger than what Wall Street consensus was forecasting at 2.47.
Revenue came out in the red, with $5.72 billion, which was below what the market was expecting at $5.81B, somewhat affected by the closing of restaurants in Russia and Ukraine over the ongoing war.
McDonald’s CEO Chris Kempczinski said the economic environment is still “challenging” with inflation and the Ukraine war weighing on the company books. MCD stock is trading at $251.58 at the time of this update during pre-market, above Monday’s closing price of $250.38.
The restaurant chain company has been a resilient stock year-to-date – having just lost 7% year-to-date versus the 17% loss by the S&P 500 – showing its defensive value against the current stock bear market.
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McDonald’s (MCD) reports earnings before the open on Tuesday, and investors will be hungry to see if the recent outperformance can be maintained.
Food stocks are generally defensive in nature during bear markets and recessions as food is a basic need. McDonald’s may operate as more of a restaurant chain and so does not fit into the defensive sphere, which usually includes food producers. However, due to its global reach and low-cost offering, McDonald’s has managed to perform well in past downturns.