It seems that McDonald's
Second-quarter financial results at McDonald's yesterday showed no sign of turmoil. The company swung to a second-quarter profit of $1.19 billion, or $1.04 per share. That far exceeded Wall Street's estimates, even without a $0.10-per-share gain from the sale of Pret A Manger. If you recall, in last year's second quarter, McDonald's reported a loss of $711 million, or $0.60 per share, after selling its Latin American and Caribbean operations.
McDonald's also posted an impressive 6.1% overall comps increase in the second quarter. The company even managed a 3.4% increase in comps here in the beleaguered U.S. market. Total sales increased 4.04% to $6.08 billion.
But the media seems to care less about those stodgy old numbers, and more about McDonald's rethinking regarding its popular Dollar Menu, which has helped it compete effectively against rivals like Burger King
Even if the soaring prices for beef, cheese, and poultry did force McDonald's to hike prices on its deep-value menu items, I think consumers would still appreciate the chain's value in a rough economy. When some higher-end restaurants are asking $10 and up for a simple burger and fries, the comparative sticker shock has to make McDonald's look awfully good. And even if Mickey D's does end up selling some Dollar Menu items for more than a buck, come on -- even some of those so-called "dollar stores" have higher price points than $1.
McDonald's has been doing very well in these troubled times, and it looks pretty darn recession-proof to me. Any weakness in McDonald's shares on concerns like these could give potential investors a very good opportunity to buy the stock at a better price. Talk about value shopping.
A valuable menu of further Foolishness:
- In June, there was no mayday at McDonald's.
- McDonald's shares went on sale in January.
- Burger feast or burger famine?