You Can't Stop McDonald's Amazing Performance

The hot side stays hot, all right. McDonald's (NYSE: MCD  ) has once again blown past expectations, proving once again that betting against the burger giant is an unwise move these days.

Mickey D's third-quarter net income increased 10%, to $1.39 billion, or $1.29 per share. Revenue increased 4% (or 6% excluding currency translation) to $6.3 billion. Same-store sales sizzled once again, increasing 6% on a global basis.

These are amazing feats for a company that's been nailing operational excellence for so long. McDonald's attributed the excellent quarterly results to its successful promotion of its McCafe Frappes and Smoothies, as well as the usual suspects on its Dollar Menu.

McDonald's success with Smoothies and McCafe Frappes comes despite formidable competition from companies like Starbucks (Nasdaq: SBUX  ) and Panera (Nasdaq: PNRA  ) . The success of Mickey D's core offerings, including its Dollar Menu lineup, makes life no easier for rival burger slingers and fellow fast food companies like Burger King, Wendy's/Arby's (NYSE: WEN  ) , Yum! Brands (NYSE: YUM  ) , and Sonic (Nasdaq: SONC  ) . Sonic recently reported declining revenue and earnings, making McDonald's performance in a tough market even more amazing.

McDonald's shares are hitting new all-time highs, but investors shouldn't let that scare them into thinking this stock's no longer a value. Its long-standing history of blowing away everybody's expectations is nothing to underestimate.

Keeping the faith in McDonald's has been paying off for its shareholders. However, if you're hankering for a cheaper price for McDonald's shares, consider putting it into our "My Watchlist" feature. Just remember, this high-quality stock still looks like a strong performer even now, given its continued appeal for consumers who are hungry for bargains.

Starbucks is a Motley Fool Stock Advisor recommendation. The Fool owns shares of Yum! Brands. Try any of our Foolish newsletter services free for 30 days.

Alyce Lomax owns shares of Starbucks. The Fool has a disclosure policy. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.


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  • Report this Comment On October 21, 2010, at 7:34 PM, midnightmoney wrote:

    My favourite bit from the news last week was how that artist in ny kept a mcburger on her bookshelf for six months and it didn't go moldy or change in any perceptible way other than getting harder than some rocks. Six months. She said she's going to keep it around as it didn't take up much space and stopped smelling after day two or something. Now she has a puck for street hockey with friends or a pendant to wear to a party or a coaster for a coffee cup. The possibilities are infinite. This brings me to the best part of this week's news, at least for me, which came today from the bbc in the form of an interview with a physicist/astronomer dude talking about the big bang and subsequent cosmic frappe and how the hubble had gleaned the oldest part of the universe--a galaxy 13 billion light years away, which is only just now perceptible here in our part of the universe, and only then with the highest of the high--the highly high--in Technology. He said the the hubble saw this galaxy as a "smudge" of light and that it took about the same amount of time for one of mankind's greatest instruments to pick up the distant signals as the hamburger from mcdonald's had to harden to its eternal consistency on that artist's bookshelf in ny--six months. (Granted my numbers may be less than accurate, though they're by no means out of left field). Am I alone in seeing these two stories as being more than a mcoincidence?

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