McDonald's Sales Rises

• By Zacks Equity Research
• On 8:03 am EST, Tuesday November 10, 2009

McDonald’s Corporation’s (NYSE: MCD - News) comparable sales for the month of October 2009 showed a sluggish growth of 3.3% as against the rise of 8.2% in the same month last year, exposing its sensitivity to rising unemployment, economic downturn, and the discount war amongst fast-food chains to lure consumers.

 

The company faces stiff competition from Burger King Holdings Inc. (NYSE: BKC - News), Wendy’s/Arby’s Group, Inc. (WEN) and Yum! Brands Inc. (NYSE: YUM - News). However, these quick-service operators are faring better than casual dining restaurant chains, such as Cosi Inc. (COSI) and Red Robin Gourmet Burgers Inc. (NasdaqGS: RRGB - News), as cash-strapped consumers are trading towards fast-food centers due to relative cheap dining options. 

System-wide sales at McDonald’s worldwide restaurants climbed 10.3% for the month of October. However, in constant currencies, the rate of increase in system-wide sales dipped to 5.2%.
 In the United States , comparable sales remained flat falling 0.1% in October (versus 5.3% increase last year for the comparable month). New menu products, including Angus Third Pounders and McCafe premium coffee line-up continued to support the month's results. 

The fast-food giant had earlier indicated that U.S. sales for the month of October would be weak. Still the month’s result fared better than the overall quick-service restaurant industry. 

In Europe, comparable sales increased 6.4% in October (versus 9.8% increase last year for the comparable month) fueled by strong performance in the U.K. , Germany and France . A variety of mid-tier items and premium menu options contributed to sales. 
Comparable sales in Asia/Pacific, Middle East and Africa (APMEA) rose 4.7% in October (versus 11.5% increase last year for the comparable month) driven by Australia and Japan, partly offset by China.

MCDONALDS CORP (MCD): Read the Full Research Report

BURGER KING HLDGS INC (BKC): Read the Full Research Report

WENDY'S/ARBY'S GROUP CL A (WEN): Read the Full Research Report

YUM BRANDS INC (YUM): Read the Full Research Report

COSI INC (COSI): Read the Full Research Report

RED ROBIN GOURMET BURGERS INC (RRGB): Read the Full Research Report

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