No matter how bad the economy gets, McDonald's (NYSE: MCD ) has seemed immune to the recession thus far. However, August's same-store sales data from the fast food chain might prompt some shareholders to choke on their Big Macs.
August comps rose only 2.2% overall at McDonald's. By geographical segment, they rose a relatively anemic 1.7% in the U.S., increased by a more robust 3.5% in Europe, and actually declined by 0.5% in the Asia Pacific, Middle East, and Africa segment.
Are those numbers really so bad, though? As continuously solid same-store sales results stack up behind it, McDonald's comps have begun to face some very difficult comparisons. August's 2.2% increase compares with a whopping 8.5% increase in the same period last year. Heck, go the extra mile and look all the way back at its August 2007 data -- the company increased comps by 8.1% back then.
Perhaps we can cut Mickey D's a little slack here. The company's been on fire for quite some time now, despite heated competition from fast-food rivals like Yum! Brands (NYSE: YUM ) , Burger King (NYSE: BKC ) , Wendy's/Arby's (NYSE: WEN ) , and the slightly more upscale Starbucks (Nasdaq: SBUX ) .
And at 15 times earnings, McDonald's still looks a heck of a lot more appetizing than many overstuffed restaurant stocks. Some have surged beyond the bounds of logic in the past six months. Witness Cheesecake Factory (Nasdaq: CAKE ) , which is currently trading at 26 times earnings; in the past 12 months, earnings per share have dropped 27%. Investors should expect few winners among restaurant stocks, as the shaky economy prompts potential diners to keep a death grip on their wallets.
Any investors tempted to ditch McDonald's shouldn't be too hasty. Like Wal-Mart Stores (NYSE: WMT ) , the Golden Arches remain well-positioned to capitalize off consumers' new frugality. Any weakness in Mickey D's shares would be a great time to buy this stock. It's a leader in its industry, a venerated blue-chip and a steady dividend payer -- all pretty darn appetizing ingredients these days.
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