Fast food king McDonald's (NYSE:MCD) is set to post first quarter earnings results before the market opens on Wednesday, April 22nd. Despite shrinking sales, the stock has kept pace with the market since the last quarterly update: Shares are up 5% in the past three months.

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Will McDonald's show progress toward its goal of becoming a "modern, progressive burger company"? Here is a look at what investors can expect when the Golden Arches announces its latest results.

  Q1 2014 Q1 2015
(% change)
Revenue $6.7 billion $6.0 billion (10.7%)
Earnings Per Share $1.21 $1.06 (12.4%)

Q1 2015 is Wall Street projection. Source: Company filings

Bitter numbers
We already have a good idea at just how bad the first quarter numbers will be, as McDonald's monthly sales figures show serious struggles for the restaurant operator. Global revenue shrunk by 8% in both January and February. Wall Street is bracing for an even worse March: Analysts peg first quarter sales at 11% below the year-ago period.

Comparable-store sales growth will be the critical metric to watch, since it strips out the noise of restaurant openings to focus on growth at an average store. Investors want to see hints of progress at answering challenges from McDonald's rivals, which the company refers to as "sustained competitive activity" in its press releases. 

That activity included more market share gains from Burger King and Chipotle Mexican Grill in the fourth quarter, leading to slumping guest traffic last quarter. In February, McDonald's posted a bitter 4% drop in comps in the U.S. A company turnaround cannot begin until management reverses that awful customer traffic trend.

Capital returns
The resulting profit pinch is hurting McDonald's business by slowing its growth path. Management has allocated just $2 billion for opening new stores and remodeling existing locations in 2015 -- its lowest capital expenditure budget in five years. Still, it has a few levers to pull to raise cash even in a tough sales environment like this. For example, McDonald's plans to sell at least 1,500 company-owned locations to franchisees. It can also tap the debt markets at historically low rates.

So cash is not really a problem, which means investors can at least expect continued growth in returns from dividend payments and share buybacks. McDonald's is on track to hit its goal of returning as much as $20 billion to shareholders through those channels by the end of 2016. It delivered $6.4 billion toward that target in 2014 alone.

Foolish wrap
This upcoming conference call will be the first with new CEO Steve Easterbrook at the helm. In the job since March, he has already announced a few big strategic changes, including a wage hike and testing for an all-day breakfast offering. 

As a shareholder, I will be listening for more details on his turnaround plan. While it is nice that cash returns are rising, McDonald's absolutely must show it can return customer traffic to growth through upgrades to its menu, faster service, and an improved in-store experience.