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McDonald’s U.S. unit disappoints but Europe strong

09 November 2010 03:17 (UTC +04:00)

Baku-APA. McDonald’s Corp (MCD.N) reported a weaker-than-expected rise in October sales at U.S. established restaurants as high unemployment keeps plaguing the world’s largest hamburger chain’s key domestic market, APA reports quoting news.yahoo.com website.
October sales at restaurants open at least 13 months were up 5.6 percent in the United States, but missed some analysts’ estimates. Oppenheimer’s Matthew DiFrisco, who had expected a 7.1 percent rise, said analysts on average had expected a 6 percent increase.
"They slightly stumbled in the U.S.," DiFrisco said, but added: "I don’t think anyone is significantly changing their investment thesis on this number from one month."
The U.S. market accounts for about 35 percent of McDonald’s revenue. Despite the macroeconomic weakness that has dented overall demand, the company has been taking U.S. market share from rivals like No. 2 hamburger chain Burger King, which is now private after its sale to 3G Capital.
Growth of 5.6 percent is "still one of the strongest numbers out there within fast food," DiFrisco said.
Shares of McDonald’s were down 0.3 percent in early trading.
Overall, McDonald’s reported a better-than-expected 6.5 percent rise in global October sales at established restaurants, as its low-price Dollar Menu and restaurant renovations helped draw more customers.
October sales at restaurants open at least 13 months were up 5.8 percent in Europe, which accounts for just above 40 percent of revenue, and up 5.3 percent in the Asia-Pacific, Middle East and Africa region. Results for both Europe and APMEA topped analysts’ expectations.
The company cited healthy demand in France, the United Kingdom and Russia for the strong performance in Europe, while sales growth in Japan, China and Australia boosted the Asia/Pacific, Middle East and Africa unit.
Systemwide sales, which includes those at restaurants operated by the company as well as franchisees, rose 7.4 percent, or 7.8 percent in constant currencies, for the month.
Shares of McDonald’s, which hit a 52-week high of $79.90 late last month, were down 0.3 percent at $79.08 on the New York Stock Exchange.