McDonald’s workers Files Law Suit over Minimum wage issue at three states of US:

McDonald’s Corp belongs to the sector of Consumer Discretionary listed with the ticker of “MCD” whereas its financial year ends at December 31^st. The company started off as a barbecue restaurant in 1940 by the McDonald brother but it was soon followed by opening the first McDonald franchise. McDonald has a network of 34,900 in 119 countries. The company ranks at number 111 in the fortune 500.  From Europe the company accounts for 39% of total revenue followed by US with 32%. McDonald’s primarily Utilizes a franchised-based business model with 81% of its outlets run as franchises as of September 30, 2013. McDonald operates 19% of its restaurants directly. Company-operated restaurants constitute 67% of total revenues generated by the company. McDonald’s also sells its company owned restaurants to franchiser. Franchised outlets contribute 33% of McDonald’s total revenues. The company is best known for its franchise model.

There is a growing protest movement going around related to the largest giant of fast food, McDonald who has not increased the hourly wages of the employees across the board. Its 2013 stock filing reveals that the campaigns related to the increased pay is one of the major risk factor that the company is facing and that will have the impact in the near future as well. This could pose a threat to the fast food global brand. 

In the mature market, hike in wages was the alarming situation for the company as according to the McDonald management “it would not be feasible to offset the higher labor cost with the price increase in products” These costs might intensify the issue related to the income inequality. 

Fast food workers advocate argue that the minimum wage should be $15 per hour. Most of the employees have the opinion that they have to bank on public assistance in order to meet their wants and needs as their current minimum wage is about $7.25 an hour.    

It was second year in a row that McDonald’s experienced the countrywide strikes from the fast food workers that are demanding $15 as a minimum wage. There is a growing movement in the social media campaigns as well. 

Will this hike in the minimum wage would have any impact on the company image or McDonald stock price still have to be figure out. According to the industry analyst there is a negligible impact on that industry that hire huge amount of minimum wage employees. Moreover the negative impact on the stock price is also minimal as stock prices are factored already in the prospective increase in wages.  In order to alert the investors related to the pending increase in wages McDonald take the help by using Security Exchange Commission filing.  

McDonald’s workers who have filed the suit claiming that they were not repaid or compensated for the cost that they incurred for cleaning their uniforms because the restaurant low pay driving the workers to clean their uniform on their own.

Looking at the earning highlights, McDonald beats the analyst expectations for EPS but slightly short of the consensus estimates for the revenues. Estimated EPS is about $1.509 but the actual happens to be $1.520. Similarly the estimated Revenue is about $7.33 billion but the actual one is $7.32 billion whose percentage change is -0.14%. The company-operated store revenues were about $4.92 billion in financial year 2013 whereas the franchise revenue in the same year is about $2.40 billion. The company also raised its quarterly dividend per share by 5% to $0.81.