McDonald's (NYSE:MCD) fourth quarter was notably weak, but that's mostly a result of challenging macro conditions. Profit was up a value-sized 1%, while revenue climbed 2%. That performance was reflected in same-store sales, the best bellwether for restaurants: up 0.3% at U.S. stores, down 0.6% in Europe, and off 1.7% in its Asia-Pacific, Middle East, and Africa segment.
Those weren't particularly compelling numbers, but McDonald's was up against a lot of consumer uncertainty. For example, in the U.S., the "fiscal cliff" hysteria kept consumers from opening their wallets a little wider, and higher taxes in 2013 will likely depress spending in the near term, the company warned. Globally, growth slowed to 3.1% last year from 5.6% in 2011. But that's still growth.
Despite the headwinds, McDonald's is using tried-and-true strategies to keep customers coming back. In the fourth quarter, the company focused on its value meal offering with heavy marketing, and it continues to roll out products, including Fish McBites, new beef sandwiches, and other entrees, to entice diners into its stores. The company understands the importance of new products well.
Despite these current challenges, McDonald's has shown that it knows its business, and management maintained its long-term target for sales growth of 3% to 5%. And growth plans remain robust, with McDonald's planning to spend $3.2 billion on 1,500 to 1,600 new stores and remodeling already-existing locations. While quarterly results may not be as consistent as a Big Mac in the near future, the long term at McDonald's is still solidly on track, making "buying the dips" a still attractive strategy with this proven leader.