April comps increased an impressive 6% overall at McDonald's. Broken out by region, McDonald's U.S. sales increased 4%, while Europe and the Asia/Pacific, Middle East, and Africa regions both surged by 6.5%. Total systemwide sales increased by 12.7% in April.
McDonald's attributed the stronger-than-expected month to success of its beverage line-up, its breakfast offerings, and tried-and-true menu items such as the Big Mac and Quarter Pounder With Cheese. However, the sales increase also incorporated higher price tags associated with some McDonaldland meals.
The price increase is no surprise; McDonald's plan to up prices has been in the news this year. Meanwhile, all restaurants currently contend with higher commodity prices, and many consumer-facing companies must establish a tricky balance of what costs they can pass on to customers before consumers won't pay up (or defect to cheaper options).
The current climate of commodity inflation is a major and increasing risk for restaurants. It's similarly grim for grocery stocks, too. And let's not forget the ramifications for companies such as Dean Foods
Still, people need to eat, and McDonald's provides deep value (and convenience, too). As far as restaurant stocks go, it's a resilient choice for defensive portfolios. Meanwhile, some of McDonald's initiatives (like McCafe beverages, which compete with Starbucks
I'd also beware of many of McDonald's direct competitors. Just today, burger rival Wendy's/Arby's
McDonald's management has proven many times over recent years that it can weather all kinds of economic conditions. As far as restaurant stocks go, it's still an appetizing choice to have on the menu. Let us know what you think of McDonald's in the comments box below, or add it to your watchlist to track its progress in this difficult climate.
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Alyce Lomax owns shares of Starbucks. For more on this and other topics, check back at Fool.com, or follow her on Twitter: @AlyceLomax. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.