McDonald's (NYSE: MCD) has done it again -- the fast-food giant has bucked the current trends in restaurants and retailers by reporting a smashing month of May sales.
Mickey D's same-store sales fired upward by 7.7% during the month. It even managed an increase in the beleaguered U.S. market, up 4.3%. Overseas comps helped, though, with Europe's same-store sales surging 9.6%, and its Asia/Pacific, Middle East, and Africa segment's comps up 9.7%.
Systemwide total sales increased 16%, or 9.1% in constant currencies. It was also helpful that this month included one more Friday and Sunday, and one fewer Tuesday and Wednesday, than May 2007.
Still, the results were darn tasty (in fact, better than analysts had expected). Other companies' problems in this difficult time for the American consumer have been well-reported. Starbucks (Nasdaq: SBUX) has had a notably hard time luring customer traffic as the economy has weakened. A glance at the charts of sit-down restaurant chains like Cheesecake Factory (Nasdaq: CAKE) or Ruby Tuesday (NYSE: RT) illustrate how difficult it's been for many higher-end restaurant chains as well.
It's just harder for many of these companies to do well than it was a couple of years ago, when eating out was simply second nature and people weren't so concerned about home prices, gas prices, grocery prices, etc.
Like its former unit, Chipotle Mexican Grill (NYSE: CMG) (NYSE: CMG-B), McDonald's, with its quick-serve, inexpensive menu, continues to fire on all cylinders, which says a lot about the allure of offering cash-strapped consumers cheap meals on the go. Although McDonald's stock may start to make many investors a bit nervous (the shares have been on a tear over the course of the last year, and it currently trades at 28 times its trailing earnings), I still say, don't bet against Mickey D's.
Take a bite of some related Foolishness:
Closed for 15 months – opening 10 days only! Get notified ahead of time as our expert portfolio manager invests $1 MILLION in the best opportunities from across The Motley Fool’s premium investment services. This is the first open since August 2008, by invitation only. Enter email below.
Terms & Conditions
RSS Headlines
Fool UK