Bloomberg News

McDonald’s October Sales Rise 5.5% on Improvements in Asia

November 09, 2011

(Updates with closing share price in fifth paragraph.)

Nov. 8 (Bloomberg) -- McDonald’s Corp., the world’s largest restaurant chain, said sales at stores open at least 13 months worldwide rose 5.5 percent last month as customer traffic in Asia increased.

The advance topped analysts’ projected gain of 4.6 percent, the average of five estimates compiled by Bloomberg News. Sales in Asia, Africa and the Middle East rose 6.1 percent, the Oak Brook, Illinois-based company said today in a statement. Analysts were expecting a gain of 5.6 percent.

Chief Executive Officer James Skinner has sought to boost sales in China by remodeling restaurants and selling locally relevant breakfast items. This year McDonald’s will open as many as 200 stores in the Asian nation, where it competes with Yum! Brands Inc.’s KFC and Pizza Hut chains. Gains in Asia were led by China, Japan and Australia, the company said.

“They have items on the menu that cater to the local culture” in China, Brian Bittner, an analyst at Oppenheimer & Co. in New York, said in an interview. “They just have momentum there.” Bittner rates the shares “outperform.”

McDonald’s was little changed at $94.60 at the close in New York. The shares have climbed 23 percent this year.

McDonald’s sales rose 5.2 percent in the U.S. and 4.8 percent in Europe. Analysts were expecting growth of 4 percent in the U.S. and 4.5 percent in Europe.

Monopoly, McCafe

Sales in the U.S. were helped by the Monopoly game promotion, along with oatmeal, McCafe drinks and the Big Mac sandwich, McDonald’s said. Yesterday, the chain said it will begin selling peppermint-flavored McCafe mochas and hot chocolate through the holiday season.

Comparable, or same-store, sales are an indicator of a company’s growth because they include only older restaurants. September comparable-store sales increased 6.6 percent globally.

McDonald’s, along with other restaurant operators, faces mounting ingredient costs. Third-quarter food costs rose 8 percent in the U.S. as the company saw higher beef prices. Chief Financial Officer Peter Bensen said last month that he expects 2012 commodity cost increases to be similar to this year’s.

U.S. food prices may rise as much as 4.5 percent this year, the Department of Agriculture predicts.

McDonald’s has more than 33,000 locations worldwide, 80 percent of which are franchised.

--Editors: Kevin Orland, Robin Ajello

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net


Hollywood Goes YouTube
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus