McDonald's April sales rise, shares gain
McDonald's Corp reported a higher-than-expected 4.9 percent rise in worldwide April sales at established restaurants, boosted by strength in Europe, and its shares rose about 4 percent.
Sales at McDonald's restaurants open at least 13 months were up 3.8 percent in the United States, 5.3 percent in Europe and 3.9 percent in the Asia/Pacific, Middle East and Africa region.
The 4.9 percent rise from the world's biggest fast-food chain topped analysts' call for a 4.4 percent gain. Sales from Europe, which contributed the biggest proportion of revenue last year, topped Wall Street's call for a rise of 3.7 percent, fueled by restaurant renovations.
Results from the United States and the Asia/Pacific, Middle East and Africa region missed analysts' average call for increases of 4.2 percent and 4.6 percent, respectively.
Still, the U.S. numbers showed that McDonald's continues to steal market share from rivals like Burger King Holdings Inc and Yum Brands Inc's Taco Bell, which posted domestic same-store sales declines for the first quarter.
As the global economy improves, (McDonald's) continues to outpace its competitors across virtually all markets, Bernstein Research analyst Sara Senatore said in a client note.
Analysts said monthly same-store sales hurdles should get easier as McDonald's laps weaker year-earlier results.
Monthly comparisons for the rest of the year are pretty darn easy. That will help them, Edward Jones analyst Jack Russo told Reuters.
McDonald's shares rose $2.57 to $70.58 in afternoon trade.
Shares in Burger King were up 4.5 percent. The stock of Wendy's/Arby's Group Inc , which reports quarterly results on Thursday, was up 5.5 percent.
U.S. stocks rallied on Monday after European policymakers agreed to a $1 trillion rescue package to stabilize world financial markets and to help resolve the euro zone debt crisis.
GAINING U.S. SHARE
McDonald's U.S. sales trends have tracked with the health of the economy. Domestic sales at restaurants open at least 13 months were down 0.7 percent in January and up 0.6 percent in February. As consumer spending ticked up in March, McDonald's U.S. same-store sales jumped 4.2 percent.
April's 3.8 percent U.S. gain followed a 6.1 percent rise in April 2009.
McDonald's has been outperforming its U.S. rivals with help from its new beverage business that offers high-profit coffee drinks like lattes and frappes and its discount Dollar Menus that cover breakfast, lunch and dinner.
McDonald's U.S. same-store rose 1.5 percent for the first quarter ended March. That compared with Burger King's quarterly North American same-restaurant sales drop of 6.1 percent and Yum's 1 percent decline for the United States.
McDonald's has nearly 14,000 U.S. restaurants in the United States -- far more than rivals like Burger King and Wendy's/Arby's. It also has more money to spend on advertising and is far ahead of competitors when it comes to selling breakfast. The chain also appeals to a broader set of customers, including retirees, ethnic groups and families.
Brands like Burger King and Taco Bell are stronger with the young males who frequent fast-food chains most, but that group is grappling with unemployment that is far higher than the national rate of 9.9 percent.
The United States contributed 35 percent of revenue last year, while Europe kicked in 41 percent.
The pace of sales gains in the United States and Europe, its largest markets, slowed from March levels as expected.
Growth from France, the United Kingdom, Germany and Russia boosted April's results from Europe. Analysts also noted that Germany, which recently had been a laggard, reflected improvement in retail sales and consumer confidence.
(Reporting by Lisa Baertlein and Dhanya Skariachan; Editing by Gerald E. McCormick and Derek Caney)
© Copyright Thomson Reuters 2024. All rights reserved.