Update McDonald’s (MCD)
Economists aren’t sure but McDonald’s (MCD) is investing for a global economic recovery.
McDonald’s expects to increase global capital spending to $2.4 billion in 2010, up from $2.1 billion in 2009. That will let the company add 1,000 new stores and “re-image’ 2300 more. To put that capital budget in the context of the rest of the fast-food industry, the $300 million increase in McDonald’s capital spending is larger than Burger King’s (BKC) entire capital budget, Deutsche Bank calculates.
The increased spending includes a 25% increase in capital spending in China that would finance the opening of 150 to 175 new stores in China in 2010.
None of this is terribly surprising when viewed through the lens of the company’s February 9 report of same-restaurant sales for January. Read more
Update McDonald’s (MCD)
Ronald McDonald delivered a big surprise this morning.
McDonald’s announced fourth quarter earnings of $1.11 a share before the market opened on January 22. That was 9 cents a share better than Wall Street had expected. In the fourth quarter of 2008 the company earned 87 cents a share. Revenue climbed 7.3% from the fourth quarter of 2008 to $5.97 billion. That too was above the Wall Street consensus (at $5.94 billion.)
But the biggest surprise came on global comparable store sales There the company reported an increase of 2.3%. Wall Street had been expecting comparable store sales to fall by 0.03%. Comparable store sales growth was, however, lower than last quarter’s 3.8% increase.
Europe was the star, Asia was a disappointment, and the United States was the big surprise when it came to regional comparable store sales. Read more
Update McDonald’s (MCD)
In the Great Recession restaurants in almost all categories continue to struggle. Almost all. McDonald’s (MCD) continues to prove that when times are tough, value counts with consumers.
On August 10, McDonald’s said that global same-store sales rose 4.3% in July. The strongest growth came from Europe, where same store sales climbed 7.2% over July 2008. But same store sales climbed even in theUnitd Stats where they gained 2.6% from July 2008. The roll out of the company’s new McCafe coffee drink line was a key driver of sales increases in the U.S.market. Read more
Update McDonald’s (MCD)
I can give you the negatives in McDonald’s (MCD) second quarter earnings report in two words: stronge dollar.
A rising U.S. currency cuts into McDonald’s revenue and earnings when local currencies–which is how people in Russia, India, and France pay for their fries–are translated back into dollars-which is how McDonald’s reports its results.
For the quarter, reported on July 23, the company saw global same store sales climb by 4.8% but total revenue fell by 7%.
The good news for next quarter and beyond is that the company is projecting less damage from the dollar and more growth from the roll out of new products such as the McCafe coffee drinks line and the new Angus burger. I’m going to keep my target price at its current level but I’m going to move out the schedule for achieving it just a bit. Read more
