McDonald's Sales Grow 4.8% in November
(McDonald's November sales report updated with analyst commentary.)
OAK BROOK, Ill. (
) --
McDonald's
(MCD) - Get Report
said its global sales improved in November.
The Golden Arches said early Wednesday it grew global comparable same-store sales -- or sales at stores open at least one year, a closely watched metric in the restaurant industry -- by 4.8%.
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Broken down by region, comps grew 4.9% in the U.S., 4.9% in Europe, and 2.4% in Asia/Pacific, Middle East and Africa.
Results came up shy of expectations. Analysts' consensus was for McDonald's to report global comps growth of 5.6%, and U.S. growth of 5.1%.
Deutsche Bank analyst Jason West was slightly less bullish, expecting McDonald's to report global comps growth of 5.3% and U.S. comps growth of 5% for November. In Europe, West expected McDonald's to report 3.5% comps growth for November, below the consensus call. In Asia/Pacific, Middle East and Africa he expected to see growth of 6%.
Disappointed investors bid the burger-and-fries chain's shares 1.8% lower in early trading Wednesday.
McDonald's shares pushed up to an all-time high on Tuesday, to $80.94, in anticipation of the November sales report.
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West noted ahead of McDonald's report that he expected November's results to be the company's "easiest compare since April '03."
"We look for US momentum to continue in Nov. as compares ease slightly vs. October and helped by national McRib
limited-time offering and softening competitive environment," he noted Tuesday.
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McDonald's said strength in the U.S. last month was driven by demand for its McRib sandwich, continued strength in its McCafe line of beverages and overall value offerings.
Strength in Europe was driven by performance in France, Germany, Russia and the U.K. McDonald's focus on premium products like the McWraps in Germany, four-tiered menu pricing and ongoing restaurant modernization all helped drive the region's results.
In its Asia/Pacific, Middle East and Africa region, sales growth was driven by demand in Australia with positive results in China and most other markets, partly offset by Japan.
"McDonald's continued strong performance reflects the benefits of our global alignment around the Plan to Win," said CEO Jim Skinner.
The "plan to win" was a comeback strategy implemented by McDonald's early last decade when the fast food chain was suffering from sluggish results.
In October,
McDonald's grew global comps by 6.5%. By region, October comps grew 5.6% in the U.S., 5.8% in Europe and 5.3% in Asia/Pacific, Middle East and Africa.
For the third quarter
McDonald's beat top- and bottom-line expectations, growing profits 10.3% to $1.39 billion and revenue 4.1% to $6.3 billion.
McDonald's said its nationwide promotion of McCafe Frappes and Smoothies, plus the everyday affordability of its Dollar Menu, helped boost sales in the quarter.
>>McDonald's Beats on Smoothie Sales Gain
Investors should continue to keep a close eye on food costs, which are generally going up, said Janney Capital Markets analyst Mark Kalinowski in an appearance on
CNBC,
pointing out that McDonald's gross margins where better-than-expected in the recent quarter, indicating the company is addressing any qualms shareholders may have with its fundamentals.
Kalinowski explained that fast food operators like McDonald's are typically better able to cope with rising commodity and other input costs because of their highly franchised model of operations. Franchisees bare the brunt of higher food costs, not the franchisor, he said.
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-- Written by Miriam Marcus Reimer in New York.
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