Consumer Stocks Decline Year-Over-Year Amid Ongoing Inflation and Economic Stagnation
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Nov 18 2025
0mins
Source: CNBC
Retail Sector Performance: Retail stocks are underperforming compared to the broader market, with the State Street SPDR S&P Retail ETF (XRT) down over 1% year-to-date, while the S&P 500 is up more than 12%. Notable declines include CarMax, Abercrombie & Fitch, and Target, while discount retailers like Five Below and Dollar General have seen significant gains.
Impact of Tariffs and Consumer Confidence: Retailers are facing challenges from tariffs affecting profit margins and declining consumer confidence due to inflationary pressures. Home improvement demand has also been impacted, as indicated by Home Depot's recent earnings miss.
Industry-Specific Trends: The retail landscape is varied, with defensive retailers and automakers performing well, while restaurant stocks lag. Analysts suggest that the consumer outlook is not uniform, highlighting a "K-shape" economy where spending varies significantly by income class.
Upcoming Earnings Reports: Investors are closely watching upcoming earnings reports from major retailers like Lowe's, Target, TJX, Walmart, and Gap to gauge the health of the retail sector amidst ongoing economic uncertainties.
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Analyst Views on MCD
Wall Street analysts forecast MCD stock price to rise
23 Analyst Rating
12 Buy
11 Hold
0 Sell
Moderate Buy
Current: 332.080
Low
300.00
Averages
337.63
High
375.00
Current: 332.080
Low
300.00
Averages
337.63
High
375.00
About MCD
McDonald's Corporation is a global foodservice retailer. Its segment includes U.S., International Operated Markets, and International Developmental Licensed Markets & Corporate. The U.S. segment is its largest market and is 95% franchised. The International Operated Markets segment is comprised of markets, or countries in which it operates and franchises restaurants, including Australia, Canada, France, Germany, Italy, Poland, Spain, and the United Kingdom. This segment is 89% franchised. The International Developmental Licensed Markets & Corporate segment is comprised of developmental licensee and affiliate markets, including equity method investments in China and Japan. This segment is 99% franchised. Its menu features hamburgers and cheeseburgers, the Big Mac, the Quarter Pounder with Cheese, the Filet-O-Fish, and several chicken sandwiches, such as the McChicken and McCrispy as well as Chicken McNuggets, Fries, shakes, sundaes, cookies, soft drinks, coffee, and other beverages.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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Stock Buybacks and Price Action: The company has a history of stock buybacks, reducing its share count by approximately 25% since 2016, which has contributed to the recent upswing in stock price, supported by solid cash flow and capital returns.
Analyst Upgrades and Market Sentiment: Following the Q4 release, several analysts issued upgrades and increased price targets for McDonald's, reflecting a positive shift in sentiment and suggesting continued stock price growth.
Dividend Stability and Institutional Interest: McDonald's maintains a high dividend payout ratio and is on track for Dividend Kings status in 2026, attracting institutional interest and indicating a solid support base for its stock amidst market fluctuations.
See More
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- Sales Decline: Wendy's reported an 11.3% decline in U.S. same-store sales and an 8.3% drop in global system-wide sales, primarily due to significantly reduced marketing spend leading to decreased customer traffic, indicating heightened competitive pressures.
- Store Closure Plans: The company plans to close 5%-6% of its U.S. locations, translating to approximately 292 to 350 underperforming units, a move aimed at addressing ongoing sales declines and protecting franchisee profitability amidst challenging market conditions.
- Breakfast Strategy Adjustment: Although Wendy's launched its breakfast menu in 2020 to attract new customers, it has now acknowledged that some locations have struggled with breakfast sales and plans to adjust operating hours based on market demand to enhance franchisee profitability.
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See More
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- Significant Revenue Growth: McDonald's reported a 10% year-over-year revenue increase in Q4, reaching $7 billion, surpassing analyst expectations of $6.84 billion, demonstrating the company's strong performance in a value-driven environment.
- Strong Same-Store Sales: Global same-store sales rose by 5.7%, significantly exceeding analyst projections of 3.9%, with U.S. same-store sales climbing 6.8%, reflecting the success of promotional activities.
- Successful Promotions: The launch of the Grinch Meal and the McValue platform resonated well with consumers, with over 50 million pairs of Grinch socks sold within days, driving sales growth.
- Future Expansion Plans: McDonald's aims to open approximately 2,600 new restaurants in 2026, including 750 in the U.S., with an overall unit count growth of 4.5%, indicating the company's confidence in future growth.
See More
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- Same-Store Sales Surge: McDonald's Q4 revenue increased by 10% to $7 billion, exceeding analyst expectations of $6.84 billion, indicating strong performance in a value-driven environment that is likely to enhance market share further.
- Profitability Boost: Adjusted earnings per share (EPS) rose by 8% to $3.12, surpassing the $3.05 analyst estimate, reflecting effective strategies in cost control and sales growth, which bolster investor confidence.
- Successful Promotions: U.S. same-store sales climbed 6.8%, driven by the Grinch Meal and promotional items, with over 50 million pairs of Grinch socks sold shortly after launch, demonstrating the direct impact of innovative promotions on sales.
- Future Expansion Plans: McDonald's aims to open approximately 2,600 new restaurants in 2026, including 750 in the U.S., with an overall unit count growth of 4.5%, indicating strong confidence in future growth and positive market demand.
See More
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- Significant Sales Growth: McDonald's Q4 revenue increased by 10% year-over-year to $7 billion, surpassing analyst expectations of $6.84 billion, demonstrating the company's strong performance in a value-driven promotional environment, thereby reinforcing its market leadership.
- Strong Same-Store Sales: Global same-store sales rose by 5.7%, well above the analyst forecast of 3.9%, with U.S. same-store sales climbing 6.8%, reflecting positive consumer response to promotional activities, particularly the success of the Grinch Meal and the launch of the McValue platform.
- Future Expansion Plans: The company plans to open approximately 2,600 new restaurants in 2026, with 750 in the U.S. and 1,000 in China, indicating McDonald's confidence in future markets and its strategic expansion plans, aiming for a 4.5% growth in unit count overall.
- Innovation Driving Sales: McDonald's will continue to introduce innovative beverage items and expand its chicken offerings to drive sales growth, and combined with its current value strategies, this is expected to further enhance its competitiveness in the fast-food market.
See More
