America might run on Dunkin' Donuts, but it's been running more slowly as sales have continued a multi-year slide. Photo credit: Mike Mozart.

McDonald's (MCD 0.38%) fourth-quarter earnings results are being hailed as proof the burger chain's turnaround plan is working, led in no small part by the introduction of a curated, all-day breakfast menu. It's the second quarter in a row McDonald's been able to put higher comparable sales up on the board.

The impact of the menu's introduction is also credited with taking down rival Dunkin' Brands (DNKN), which suffered a nearly 1% decline in comparable store sales at its Dunkin' Donuts chain in the fourth quarter.

Seems easy to figure out the culprit, no? McDonald's is up, Dunkin' Donuts is down, must be McDonald's that's the cause. Analysts even pitched that point during Dunkin' Brands' earnings conference call, asking how they had responded to its rival's threat.

Dollars to doughnuts it wasn't because of breakfast
While the burger joint's results are a step on the road to recovery, it needs more than these two data points to show it has traction, because it's still losing customers. McDonald's store traffic was still negative, and its comp gains are better because it increased prices. Its own commodity costs fell, with beef prices down 1%, but the restaurant has been able to gain because it raised prices by 2%.

McDonald's all-day breakfast menu has been hailed as a success, but it still needs to prove itself before the burger chain can say its truly in turnaround mode. Photo source: Alpha.

All-day breakfast has indeed generated a buzz about the brand that's been sorely lacking, and the promotion has exceeded McDonald's internal estimates for what it was expected to achieve, but the chain hasn't released any numbers to be able to make a judgment about its effectiveness.

And Dunkin' Brands CEO Nigel Travis pretty much rejected its rival's all-day menu as the proximate cause of his own restaurant's decline. As he noted on the call with analysts, the chain has been suffering a multi-year decline, so McDonald's promotion had at best a marginal impact.

A basket of goodies
What he did credit the all-day breakfast menu with doing, however, and what he says was of greater importance to the doughnut shop's performance, was spurring the competition to offer extremely discounted meal options, the result of which drew customers away.

Wendy's (WEN -0.10%) and Burger King -- and McDonald's, too -- got even more promotional in the quarter by offering bundled meal discounts. It was more the appearance of Wendy's 4-for-$4 meal combo, and the response to it by Burger King with a 5-for-$4 deal and McDonald's and McPick 2 menu that hurt Dunkin' Donuts sales. Restaurant Brands International (QSR 0.89%), which runs the Burger King chain, also reintroduced its popular 10-piece chicken nuggets for just $1.49, while Yum! Brands' (YUM 0.03%) KFC chicken chain offered a bucket of chicken for $5.

It was the competition pushing the value end of their menus, and not simply McDonald's all-day breakfast menu, that caused Dunkin' Donuts' decline to continue.

As Travis pointed out, the doughnut shop already offers a menu that's the same throughout the day, and customers can get everything on the menu at any time, not like McDonald's, which only offers select items.

Others pointed that out as well after the burger chain announced the change, with both Sonic (SONC) and IHOP remarking on social media they've been offering the all-day breakfast option all along.

No doubt the menu is what McDonald's customers have been clamoring for, and the restaurant recently said it was going to expand it by including the popular McGriddle breakfast sandwich, too. That's a riskier proposition, though, because of how McGriddles are made, and it could undermine the whole experiment.

Feeding the fire of dissent
Yet McDonald's franchisees aren't eager to see the value meals expanding because they're not especially profitable for them. They were previously grousing about the restaurant's focus on the McPick 2 menu, and now they'll have to juggle their kitchen operations even more to accommodate adding McGriddles, since they're heated in the same ovens used for apple pies and mozzarella sticks (another big, recent promotion of the chain).

All-day breakfast has given McDonald's a needed boost in buzz, but it's not the cure-all analysts and others have made it out to be. Once the excitement over it's introduction dies down -- and even CEO Steve Easterbrook admits it will die down soon -- the structural problems with the chain will remain.

Of course, Dunkin' Donuts has its own set of issues it needs to address, but McDonald's all-day breakfast isn't one of them.