
McDonald's Reaches All-Time High
(McDonald's trading at all-time high report updated with additional analyst commentary.)
OAK BROOK, Ill. (
) --
McDonald's
(MCD) - Get Report
shares pushed up to an all-time high Tuesday as investors anticipated a strong report on the restaurant chain's November sales.
McDonald's shares tapped an all-time high of $80.94 Tuesday afternoon, and traded around $80.41 minutes ahead of the closing bell.
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McDonald's is due to report its November monthly sales figures on Wednesday. Analysts' consensus is for the Golden Arches to report global comparable same-store sales growth -- or sales at stores open at least one year, a closely watched metric in the restaurant industry -- of 5.6%. The consensus for U.S. comps growth at McDonald's in November is 5.1%.
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Deutsche Bank analyst Jason West expects McDonald's to report global comps growth of 5.3% and U.S. comps growth of 5% for November, compared with a 0.6% decline in the year-earlier month.
"According to our model, this will be MCD's easiest compare since April '03," he noted.
"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.
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In Europe, West expects McDonald's to report 3.5% comps growth for November, below the consensus for same-store sales growth of 4.9%. In Asia/Pacific, Middle East and Africa he expects to see growth of 6%.
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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