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:


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