McDonald's Hot August

Recs

8

McDonald's (NYSE: MCD) is still putting the "gold" in Golden Arches, judging by its success in August.

The fast-food giant's August total same-store sales increased by 8.1%, and Mickey D's displayed strength in all its geographic regions. U.S. same-store sales increased by 7.4%, European comps grew by 6.1%, and Asia/Pacific, Middle East, and Africa comps were up a stunning 12.4%.

In the U.S., McDonald's pointed to success with its breakfast business, beverages, and new food offerings. Abroad, the company said that special summer menu offerings and relevant marketing appealed to customers in Europe, with particular strength in France, the U.K., and Germany. In its Asia/Pacific, Middle East, and African region, Japan, Australia, and China were big contributors, and the company said that locally relevant menu promotions, extended hours, and breakfast contributed to the magic as well.

McDonald's seems to have its competitive edge well-honed. The global good news is heartening, and one might wonder whether some of its interesting initiatives -- like its strategies in Europe -- are helping it gain even more traction against veteran rivals like Burger King (NYSE: BKC), Wendy's (NYSE: WEN), and Yum! Brands' (NYSE: YUM) Taco Bell and KFC.

McDonald's almost seems a bit boring lately, but in a good way -- it keeps showing impressive growth despite its blue-chip status, rising from the ashes of its tough times a few years back. The company seems to be developing innovative ways to lure customers into its restaurants, then keep them coming back for more. And of course, given the value offered by McDonald's menu, it's probably got some resilience to current macroeconomic concerns.     

Read a slew of news articles on the topic, and you'll see that McDonald's shocked Wall Street analysts with August's strong performance, leading many to adjust their earnings expectations upward for this year. Any investors worried about the stock's stamina should be soothed by shares' 39% rise over the past year. With a successful turnaround under its belt, and an obvious willingness to evolve as it takes its business into the future, I'd call McDonald's a solid idea for investors seeking stable long-term stocks.    

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12/1/2009 4:01 PM
BKC $17.28 Up +0.28 +1.65%
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McDonald's Corp CAPS Rating: ****
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YUM $35.29 Up +0.02 +0.06%
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