McDonald's (MCD) Sees Larger FX Impact in FY13; Margins Pressured on Food Inflation

The following are a few key points from McDonald's (NYSE: MCD) quarterly conference call:

• Foreign exchange now expected to cost 7 to 9 cents of EPS in FY13, versus prior expectations of a 1 to 2 cent impact
  
  
• CapEx cut by $100 million to $3.1 billion
  
  
• China comps down 6.1 percent, from a 4.6 percent drop in Q113
  
  
• Food inflation pressuring margins. Most acute in North America and Asia
  
  
• Customers in Japan still price sensitive. Germany and France still seeing weak performance
  
  
• Seeing contraction in 7 of its 11 top markets
  
  
• Inventories up 49.1 percent with sales up 30.7 percent
  
  
• Reminder: Asia/Pacific, Middle East and Africa (APMEA) comps fell 0.3 percent, the tenth-straight quarter of lower growth.

McDonald's is down 2.7 percent.

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