McDonald's Earnings Miss: Why Investors Should Worry

McDonald's (NYSE: MCD) has normally been a safe bet to beat earnings expectations. For several quarters, it has been able to do better than what analysts were expecting. But that changed this month when it released its third-quarter results and failed to beat expectations, sparking concerns that the competition may have gained an advantage over the popular fast-food chain.

It also didn't help that the earnings miss was significant, with EPS of $2.11 falling well below the $2.21 that analysts were looking for. Sales were closer, but at $5.4 billion, they also missed expectations of $5.5 billion.

It wasn't all bad news, however, as the company's same-store sales growth of 5.9% beat the 5.6% that was expected. Comps are especially important for a company like McDonald's that is always looking for ways to grow its top line despite dealing with a lot of saturation and heavy competition.

Source Fool.com