Here we go again: McDonald's (NYSE: MCD ) is hot, hot, hot, reporting another great month of same-store sales and ups its quarterly guidance.
Mickey D's said that same-store sales increased 5.9% in September (versus 7.7% last year) and 6.9% in the third quarter (versus 5.8% last year). The company performed particularly well in the Asia/Pacific, Middle East, and Africa segments, with a 12% comps increase for the month and 11.4% for the quarter; but every segment posted higher sales.
What's the magic? McDonald's cited value, menu choice, and compelling marketing, which tells us little we didn't already know. The company pointed to similar initiatives for the U.S., as well as the strength of its breakfast offerings -- again, that's not news. (And everyone's heard plenty about how McDonald's is hot on the heels of Starbucks' (Nasdaq: SBUX ) coffee niche, too, of course.)
Even better for McDonald's shareholders, it's raising its third-quarter guidance beyond Wall Street analysts' expectations for $0.77 per share. This follows McDonald's hot August, which had already prompted many analysts to raise their expectations.
The company reported Q3 earnings of $0.89 per share, including a few lumps -- if you can keep track of them. There was a one-shot $0.06-per-share boost from McDonald's sale of Boston Market, plus a $0.03-per-share boost from currency translation. Mickey D's also recorded a $0.04-per-share expense from its Latin American license transaction, but that was cancelled out by a $0.04-per-share tax benefit. Got all that? Lest you think McDonald's is slacking, though, note that income from continuing operations will increase 22%.
McDonald's shares have been on a steady upward trajectory lately. This Big Mac has all the fixin's right now, including growth and dividends. In such a hungry, competitive landscape -- Burger King (NYSE: BKC ) , Wendy's (NYSE: WEN ) , and Yum! Brands (NYSE: YUM ) are the tip of the iceberg -- McDonald's is proving itself nearly unstoppable as long as it has its act together.
Conventional wisdom might consider McDonald's too pricey now. But as I've said before, the magnitude of its winning streak, and its consistent, expectation-beating excellence, could make pessimists regret losing faith. Some stocks earn their high prices, and McDonald's sounds like a keeper to me.
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