An All-American Winner

Ford (NYSE: F  ) and General Motors (NYSE: GM  ) haven't given us much reason to feel so great about some companies that once exemplified the good old U.S. of A. Thank goodness McDonald's (NYSE: MCD  ) is there to remind us that there's excellence left in iconic American brands; I'll bet Ray Kroc would be proud.

I recently begged Uncle Sam to let Ford and GM go ahead and fail, since they haven't remained competitive, despite America's historical leadership in automobiles (and now the Big 3 are lining up at the public trough for government loans). Of course, burgers and fries are also as American as apple pie, and McDonald's August comps were yet another absolutely astounding success (no assistance needed!).

McDonald's August same-store sales skyrocketed 8.5% overall. Even more impressive, U.S. comps increased by 4.5%, which the company attributed to its breakfast menu, an Olympic-related Southern Style Chicken Sandwich and Biscuit promotion, and, of course, value offerings.

International sales were also stunning. Comps increased 11.6% in Europe and 10% in the Asia/Pacific, Middle East, and Africa market.

As has been the case for quite some time now, Americans' recent budget-minded consumption has meant they're lining up for McDonald's. (Wal-Mart (NYSE: WMT  ) has been another beneficiary of consumers' penny-pinching ways.) Wendy's (NYSE: WEN  ) and Burger King (NYSE: BKC  ) can take their shots, but it looks like nobody's stopping Mickey D's.  

One could nitpick and point out that this August was more favorable, since it had one more Saturday and Sunday than the same time last year, adding up to a boost of 0.3% to 2.1% in comps, depending on the area of the world. Then again, it's not like McDonald's slacked off last August, either; back then its comps surged 8.1%.

McDonald's has blown past analysts' expectations again and again. This outperformance has been going on for so long it's difficult to remember way back when McDonald's was in dire need of a turnaround.

I'm sure some investors are wondering if they should get out of McDonald's stock while the getting's still good. I'm thinking, not so fast; it can be a huge mistake to ditch a real winner, and McDonald's has shown itself to be just that. Many American companies have left us starving for some good news, but fortunately McDonald's still has it on the menu.

Put some related Foolishness on the menu:

Wal-Mart Stores is a Motley Fool Inside Value recommendation. Try any of our Foolish newsletters today, free for 30 days.

Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy.


Read/Post Comments (3) | Recommend This Article (4)

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  • Report this Comment On September 10, 2008, at 3:07 PM, wjausa wrote:

    YOU ARE A TRUE MOTLEY FOOL FORD AND GM ARE TWO OF THE COMPANIES THAT HELP SAVE THE WORLD, IF IT WAS NOT FOR COMPANIES LIKE FORD AND GM YOU MAY NOT BE HERE,IF NOW THEY NEED SOME HELP SO BE IT--WOULD JAPAN HELP TOYOTA, YES THEY WOULD. THINK ABOUT WHAT THEY DID IN WORLD WAR II,

  • Report this Comment On September 11, 2008, at 11:26 AM, HammerHead411 wrote:

    So it's OK to bail out the credit market & the mismanaged banks but you don't see the long-term benefit of assisting major NA employers? You must realize that if the Big-3 files (if one goes then they all go) then the gov't assumes all pension obligations (which are probably under-funded). And all existing healthcare coverages are not protected via a bankruptcy. Isn't it smarter to provide low-interest guarantees (similar to the earlier Chrysler deal) than let these businesses fail?

    Ditto with the prior comment -- FoMoCo banged out a B-24 Liberator bomber every 40 mintes during WW II!

    Really blowing MCD's horn & dogging the auto sector is pathetic. What percentage of MCD workers make at/near minimum wage, have no/limited health insurance, speak little/no english????? And let's not forget that MCD has a great deal of accountability for America's obesity rate (calc the fat & calories of a Big Mac combo deal upgraded with a shake?). The only reason they were not held accountable in suits was via their paying off the politicians via the "Hamburger Bill". They are NO different than the tobaco cos. and should've assumed some significant penalties (for making Americans fat & unhealthy).

    I think you made some really uninformed comparisions here.

  • Report this Comment On September 12, 2008, at 12:59 PM, TMFLomax wrote:

    Thanks for your feedback. I really have hit some nerves for not being a fan of the idea of government assistance for the auto industry. However, there is one thing I'd like to clarify, and that is, no, I am not thrilled with bailouts in general, and am, in effect, wondering, "When will it end?" That's why I recently wrote this satirical piece, wondering that very thing: http://www.fool.com/investing/general/2008/09/10/fool-blog-t...

    And true, McD's does have critics and there is good reason for some of those criticisms (although I don't agree that companies should be penalized for people's choices like fast food diets or smoking). I know many people would disagree with me there too of course, so thanks for raising the points.

    Best,

    Alyce

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