MCD golden arches shining brightly
50.89 now
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Reuters
McDonald's May sales jump
Friday June 8, 11:06 am ET
By Brad Dorfman
CHICAGO (Reuters) - McDonald's Corp. (NYSE:MCD - News) on Friday posted its largest monthly comparable-store sales increase in more than three years, helped by the popularity of its small sandwiches in France and a big green ogre called Shrek in the United States.
The world's largest restaurant chain said sales rose 8.7 percent in May at restaurants open at least 13 months, beating analysts' expectations and sending its shares nearly 2 percent.
Wall Street analysts had been expecting a rise of 5 percent, according to research notes.
The sales increase was the largest since April 2004 and continues the strong showing by McDonald's, which has focused on new products such as entree salads and chicken snacks to help emerge from a slump earlier this decade.
"I suspect at some point the growth will have to slow; I'm not sure I would expect it any time in the near future though," said Janna Sampson, director of portfolio management at Oakbrook Investments in Lisle, Illinois, which holds about 680,000 McDonald's shares.
Same-store sales, a key retail measure, rose 7.4 percent in the United States, helped by a promotional tie in with the DreamWorks (NYSE:DWA - News) movie "Shrek the Third" and continued strength in its breakfast business.
Same-store sales rose 8.9 percent in Europe, boosted by chicken snack wraps and other items in Germany and P'tit Plaisir sandwiches in France -- a line of smaller beef and chicken sandwiches.
Same-store sales rose 10.2 percent in the company's Asia/Middle East and Africa unit, helped by western-style breakfast items in China and deli chicken sandwiches and extended hours in Australia.
Systemwide total sales rose 11.9 percent in May, but were up 10 percent on a constant currency basis.
McDonald's shares were up 83 cents, or 1.7 percent, at $51.04 in morning New York Stock Exchange trade.
The stock is up more than 15 percent this year, compared with about a 5 percent increase for the Dow Jones U.S. Restaurant and Bars index (DJI:^DJUSRU - News).
But with the increase in the stock in recent years, Sampson is skeptical about how much more it can rise.
"I don't expect a sell off in the stock," she said. "I obviously don't think the upside is what it was a year ago or three years ago. It's just a function of will the economy continue to grow and will the company continue to perform as well." |
