McDonald’s Reports Less Than Feared Drop in Same-Store Sales (MCD)
McDonald’s Corp. (NYSE: MCD) reported on Friday that its same-store sales in February fell in the U.S. and international markets, citing cautious spending by consumers in the backdrop of economic uncertainty.
Shares, however, edged higher as dip in sales at established stores was less than feared.
Sales at stores open for at least 13 months fell 3.3% which was less than analysts’ consensus estimate for a decline of 3.55%.
In the U.S., consumers have curtailed discretionary spending since the beginning of the new-year. Increase in payroll taxes, higher gas prices, delays in tax refunds, along with fear of job cuts amid wrangling in Washington over budget cuts, all weighed on consumer spending. From discount retailers like Wal-Mart stores, to fast food chains like McDonald’s have felt the pressure on the top line as U.S. consumers go slowly on spending.
For McDonald’s, the U.S. market is the second biggest market in term of revenue generation after Europe.
Sales at established stores in international markets fell 1.5% in February against analysts’ estimation of 1.63% decline.
In Europe, same-store sales shrank 0.5%, almost matching with analysts’ consensus estimate of 0.46% fall.
Same-store-sales in the Asia Pacific, the Middle East and Africa dropped 1.6%, slightly lower than analysts’ estimation of 1.69% decline.
After adjusting one extra of sales in February 2012 (since it was a leap year), same-store-sales in international markets rose 1.7% YOY while in the U.S. comparable store sales were flat.
However, the Company remains confident on “fundamental strength” of its business.
“We have the operating experience to manage through the current challenging environment and the right strategies in place to grow the business for the long term,” said McDonald’s President and Chief Executive Don Thompson in a stamen.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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