McDonald's Sales Are Up

Great article on McDonald's Sales from Reuters.

McDonald's October sales beat Street; dollar weighs
Reuters
Monday, November 10, 2008; 11:39 AM
http://www.washingtonpost.com/wp-dyn/content/article/2008/11/10/AR2008111000693_pf.html

LOS ANGELES (Reuters) - McDonald's Corp on Monday said global sales at its fast-food restaurants open at least 13 months rose 8.2 percent in October, topping analysts' targets and sending its shares up more than 2 percent.

Same-store sales, a key gauge of retail health, rose 5.3 percent in the United States, 9.8 percent in Europe and 11.5 percent in the Asia/Pacific, Middle East and Africa (APMEA) division.

RBC Capital Markets analyst Larry Miller said the October results "were above expectations in every division" and that the report's one "negative," which was not unexpected, was that the impact of foreign exchange has started to turn against the company in its overseas markets.

McDonald's last week said it expects revenue and operating income to be hurt by foreign currency translation in the current quarter because the U.S. dollar has gained strength.

RBC's Miller had been looking for overall global sales at established restaurants to be up 5.5 percent, which he said was above the consensus call for growth of 5.2 percent.

McDonald's, which has more than 31,000 restaurants in more than 100 countries, said that systemwide sales for its worldwide restaurants increased 5.4 percent for the month, or 9.9 percent in constant currencies.

The Oak Brook, Illinois-based company said breakfast, Southern Style Chicken sandwiches and its Monopoly game helped drive domestic traffic.

Strong results in the United Kingdom, France and Russia as well as promotions and value items boosted results in Europe, while localized menu items, value items and extended hours helped in APMEA, the restaurant chain said.

McDonald's has been one of the best performing fast-food chains, beating peers like Wendy's/Arby's Group Inc and Jack in the Box Inc at driving customer traffic and keeping a lid on commodity costs.

Still, rising prices for key ingredients like beef and cheese have prompted the company to consider changes to its popular Dollar Menu as the higher cost of making its flagship Double Cheeseburger pinches franchisees -- whose payments to McDonald's represent about two-thirds of company profits.

Shares in McDonald's were up $1.15, or 2.1 percent, at

$56.62.

Elsewhere, shares in rival Burger King Holdings were down 0.6 percent. Wendy's/Arby's shares tumbled more than 5 percent, Jack in the Box shares were off about 1.5 percent and stock in CKE Restaurants Inc , parent of the Carl's Jr burger chain, fell 3.6 percent.

(Reporting by Lisa Baertlein in Los Angeles and Nicole Maestri in New York; Editing by Steve Orlofsky and Brian Moss)
© 2008 Reuters