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Foreign sales keep McDonald's above water in Oct.
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By The Associated Press
| 11/09/2009 |
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NEW YORK (AP) -- McDonald's Corp., the world's largest fast-food chain, said Monday that monthly sales growth edged down in October in the U.S., only the third time the monthly figures hasn't climbed in 6 1/2 years.
That was offset by stronger growth globally and the U.S. sales comparison matched McDonald's forecast. Shares rose nearly 1 percent in premarket trading.
McDonald's has experienced strong sales in the U.S. during the recession as consumers traded down to cheaper food options. However, sales in stores open at least 13 months edged down 0.1 percent in the U.S. in October, partly due to strong year-ago comparisons. Last year, sales in stores open at least one year rose 5.3 percent in the U.S. and 8.2 percent overall.
McDonald's is also facing pressure from high unemployment in the U.S., which keeps customers away during the company's breakfast and lunch hours.
Demand for Dollar Menu items, premium Angus burgers and McCafe espresso-based coffees were strong in the U.S.
Results matched McDonald's forecast last month that October results would be flat to slightly negative.
Stifel Nicolaus analyst Steve West said results were better than he expected and raised his fourth-quarter earnings estimate a penny to $1.04. Analysts polled by Thomson Reuters, on average, predict a profit of $1.02 per share.
"We continue to have a positive outlook for continued momentum and industry-leading fundamentals and now anticipate positive impact from foreign exchange across all regions," he said.
The dollar has been weakening lately, which helps companies such as McDonald's with a large overseas presence because overseas revenue tranlates back into more dollars.
West expects sales in stores open at least 13 months to rise 2 percent to 3 percent in the fourth quarter, helped by sales of the company's Angus burger and McCafe drinks driven by the company's Monopoly game promotion.
Sales in stores open at least one year rose 3.3 percent overall, including a 6.4 percent rise in Europe and a 4.7 percent rise in Asia/Pacific, Middle East and Africa.
In Europe premium and mid-tier menu options performed well. In Asia Pacific, Middle East and Africa, core menu, value and breakfast options did well.
McDonald's, in Oak Brook, Ill., said total sales rose 10.3 percent globally, or 5.2 percent excluding currency effects.
Year-to-date, sales in stores open at least one year rose 4.2 percent, while total sales edged up 0.9 percent, or 6.1 percent excluding currency effects.
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