McDonald's: Still Smokin' Hot

Just when you thought it couldn't get any better, McDonald's (NYSE: MCD  ) served up another happy meal surprise.

Same-store sales in February soared 11.7%, with European comps up a stunning 15.4%. Even the U.S. market, which is experiencing a consumer slowdown, had an impressive 8.3% increase. The Asia Pacific, Middle East, and Africa (APMEA) segment rounded things out with a 10.9% boost. So obviously, McDonald's comps were meaty across the board.

In the U.S., McDonald's cited its breakfast and premium roast coffee as big contributors to the strong month. (I'm sure any mention of the "coffee" angle may put some Starbucks (Nasdaq: SBUX  ) fans in a tizzy.) In Europe, McDonald's said the U.K., France, Germany, and Russia were strong, and in the APMEA segment, Australia, China, and Japan were highlighted.

This is a far cry from January, when investors took a slow month hard, even though McDonald's had been raking in the strong sales gains for quite some time. Back then, I argued that shares of the stocks were temporarily on sale, and it looks like that was the case.

I still believe McDonald's is in a good position, even if consumers here in the U.S. are strapped for cash. Economizing is probably high on many priority lists right now, and McDonald's low prices help them do just that.

I also believe the current climate is probably good for grocers like Safeway (NYSE: SWY  ) and Kroger (NYSE: KR  ) , and even Whole Foods Market (Nasdaq: WFMI  ) . Despite Whole Foods' "Whole Paycheck" reputation, my hunch is that many people are hunkering down and cooking at home, and if there's a flight to quality, I'm quite sure Whole Foods is high on that list as well.

It's the restaurant stocks with higher-priced menus I'll be avoiding, like Cheesecake Factory (Nasdaq: CAKE  ) or Ruth's Chris (Nasdaq: RUTH  ) , at least until there are more signs that consumers are spending again. After all, of all the ways to save a few dollars, cutting back on sit-down dinners out is among the easiest.  

But I digress. As I recently theorized about Wal-Mart, McDonald's is really in its element right now, given consumers' drive to watch their budgets. However, another thing that makes me really like McDonald's for the long term is that it is currently proving its business can excel in good times and in bad -- and that's testament to the amazing quality of its recent turnaround.

More on the menu:

Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 594866, ~/Articles/ArticleHandler.aspx, 10/28/2016 8:26:11 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 11 hours ago Sponsored by:
DOW 18,169.68 -29.65 -0.16%
S&P 500 2,133.04 -6.39 -0.30%
NASD 5,215.97 -34.29 -0.65%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/27/2016 4:00 PM
MCD $112.08 Down -0.03 -0.03%
McDonald's CAPS Rating: ***
CAKE $52.00 Up +2.88 +5.86%
The Cheesecake Fac… CAPS Rating: ***
KR $31.02 Up +0.12 +0.39%
Kroger CAPS Rating: ****
RUTH $14.45 Up +0.20 +1.40%
Ruth’s Hospitality… CAPS Rating: ***
SBUX $53.59 Down -0.04 -0.07%
Starbucks CAPS Rating: ****
SWY.DL $0.00 Down +0.00 +0.00%
Safeway CAPS Rating: **
WFM $28.29 Down -0.14 -0.49%
Whole Foods Market CAPS Rating: ****