McDonald’s Sales Numbers Rise On The Back Of US Economy

McDonald’s Corporation (NYSE:MCD) has reported that October sales have edged up on the back of a slightly stronger U.S. economy. Same store sales rose by 0.5 percent on a global scale, thanks to the strength of U.S. and European sales offsetting the soft markets in Asia.

Soft Economy Affecting Sales

Last month McDonald’s analysts noted that sales for October would remain flat. Last year the company reported its first sales decline in nine years, leaving investors concerned over the strength of the brand.
Now, a year later, McDonald’s is still fighting the soft global economy in a struggle to remain on top. As the world’s largest fast food company, McDonald’s has been the king of burger joints for many years. However, the king has been struggling to overcome weak markets and is hoping to improve sales through new product offerings.

New Menus

Recently McDonald’s made the decision to remove the $4 Angus burger from its menu due to poor sales and weak consumer demand for the premium meat. However, according to reports, the burger chain is intending to roll out a new Dollar Menu & More lineup for its U.S. stores that is aimed at increasing consumer spending. This new menu will include its normal dollar menu items, as well as several items that will be priced at both $2 and $5.

Sales Rundown

McDonald’s Corporation (NYSE:MCD) reported that sales across all of its stores rose 1.5 percent. Excluding currency fluctuations, the stores reported a total rise of 3 percent.
European sales in restaurants opened more than 13 months ago, and same store sales across the continent improved by 0.8 percent. This is directly caused by strong performance in the U.K., France, and Russia. However, the results from Germany came in on the negative side.

U.S. same store sales also rose, although at a smaller margin of 0.2 percent. These numbers were bolstered by McDonald’s new product offerings, including Mighty Wings and the Pumpkin Spice Latte that is being offered during the holiday season. The new premium Southwest McWrap has also performed well for the company in the U.S. market.

The Asia/Pacific region, Middle East, and Africa reported the worst results for the fast food giant. These areas reported an overall decrease of 2.8 percent in same store sales, which was mainly attributed to poor results in Japan.

The company is focusing on its breakfast menu, McCafe coffee line, and its kiosk sales to improve performance for the region.

Stock Snapshot

Last month, when the food chain reported its earnings, it narrowly beat the estimates laid out by analysts. However, even though the company beat estimates, it reported extremely disappointing results in same store sales growth on a global scale.

The company’s CEO, Don Thompson, said, “We remain confident in the fundamental strength of the McDonald’s System and our ability to drive initiatives that will deliver the greatest benefit for our customers.”
McDonald’s Corporation (NYSE:MCD) has risen by 10 percent this year, and shares closed on Thursday evening at $97.20. They have remained flat in premarket trading, and it will be interesting to see what the stock does over the next few days now that October’s numbers are in.

Disclosure: Author has no position in any stocks mentioned, nor does he plan to initiate one in the next 48 hours.