Fast-food giant McDonald's
Here are the results for 2005, and they're something investors can sink their teeth into with relish. September came in with worldwide same-store sales up 3.9% from September 2004. For the quarter, they rose 4.1%, and they expanded 3.8% year to date.
Add in all sales from all the namesake restaurants, and the third quarter's global revenue was up 6.3%. That's well above the company's goal of 3% to 5% annual sales growth and far above the 2.8% the company booked last quarter.
Just like August, September's strong numbers were fueled by the new Premium Chicken Sandwich, longer restaurant hours, and a strong breakfast business.
A look at the details shows why a geographically diversified portfolio can be beneficial. In the U.S., where sales were buffeted by hurricanes, same-store sales managed a less-than-robust 2.7% increase this September, comparing poorly with last year's gigantic 10.6% rise. But in Europe, where same-store sales fell 0.6% in September 2004, this year they were ahead an extremely strong 6.6%.
Mickey D's domestic results are similar to those posted at the No. 2 player in the fast food industry, YUM! Brands
McDonald's stock, up 0.8% in mid-afternoon trading, is in the middle of its 52-week trading range. Investor uncertainty about the economy is probably keeping the stock in check. But consider this. McDonald's generated $1.5 billion in trailing annual free cash flow. That leaves the company with ample opportunity to continue to reduce total debt, hike dividends (which it recently upped 22%), and buy back shares. When you ask "Where's the beef?" on Wall Street these days, you're likely to be directed to the nearest Golden Arches.
Are you looking for more Golden Arch Foolishness? Try these:
Are you looking for great companies? Let Motley Fool co-founders David and Tom Gardner find the next big winner for you. Subscribe to the Motley Fool Stock Advisor newsletter service.