McDonald's faces risks from intense competition, fluctuating commodity prices, labor shortages, supply chain disruptions, and potential legal challenges. The war in the Middle East negatively impacts international sales. Currency fluctuations affect reported earnings. Technology failures, security breaches, and regulatory changes pose operational and reputational risks. Economic downturns and unfavorable market conditions also threaten profitability. Impairment charges and restructuring costs are also potential risks.
Financial Upside
McDonald's anticipates continued growth through its "Accelerating the Arches" strategy, focusing on maximizing marketing, core menu items, and digital/delivery/drive-thru expansion. Restaurant development is a key driver, with plans to open over 2,100 new restaurants in 2024. The company expects a 90% free cash flow conversion rate. Franchised restaurant margins are a significant revenue source. Positive comparable sales in the U.S. and International Operated Markets are also positive indicators.
