Golden Arches: These Results Shouldn't Surprise Us
Dec 13th 2012 11:30AM
Updated Dec 13th 2012 11:46AM
McDonald's released sales results on Monday highlighting a 2.4% increase in global comparable-store sales in November. Investors welcomed this news compared to the dismal 1.8% decrease reported in October. Comparable sales represent sales at all restaurants, company-owned or franchised, that have been in operation at least 13 months.
Globally, systemwide sales, which include new restaurants, were up 3.2%. Analysts were surprised at the increase, but how surprised can they really be? October was ugly, but we need to take a look at history. October was the first monthly decline in comparable sales in nine years.
The rebound in comparable sales gives investors reason to be more optimistic looking toward its fourth-quarter earnings, which are expected on Jan. 23 before market open.
Here's what president and CEO Don Thompson had to say:
McDonald's is a destination for more than 69 million customers every day because we offer great-tasting, high-quality food in increasingly modern and appealing restaurants. We are strengthening our focus on the global priorities that are most impactful to our customers -- optimizing our menu, modernizing the customer experience and broadening accessibility to our Brand to move our business forward amid today's broad-based economic and competitive challenges. I am confident that these strategies and the actions we are taking will solidify our foundation and deliver long-term profitable growth in the future.
The restaurant industry is fiercely competitive. McDonald's is working to keep its customers coming back and avoiding its competitors such as Burger King and Wendy's . One thing McDonald's has up its sleeve is the re-release early next week of its BBQ pork sandwich, the McRib. There's a fanatical following for the rarely offered sandwich, and it's expected to help sales finish out strong for the quarter.
This is good news for investors awaiting McDonald's fourth-quarter earnings next month. But McDonald's still has an uphill battle ahead of it as it deals with increasing consumer awareness of nutritional and health factors.
One huge thing McDonald's has in its corner is being arguably the most well-known brand in the fast-food industry. With its brand power and emphasis on value items, it will remain an industry juggernaut for the foreseeable future. November's sales numbers should serve as a reminder that, as history has shown, it's more unusual for McDonald's not to increase comparable-store sales.
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The article Golden Arches: These Results Shouldn't Surprise Us originally appeared on Fool.com.Fool contributor Daniel Miller has no positions in the stocks mentioned above. The Motley Fool owns shares of McDonald's. Motley Fool newsletter services recommend Burger King Worldwide and McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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