McDonald’s Corp.’s global same-store sales rebounded to a 2.4-percent increase in November after falling 1.8 percent in October, the company’s first monthly same-store sales decrease in more than nine years.
The brand’s system of more than 14,000 locations in the United States led the way with a 2.5-percent increase in same-store sales for the month of November compared with a 6.5-percent jump in November 2011. In addition, same-store sales rose 1.4 percent in Europe and 0.6 percent in the Asia/Pacific, Middle East and Africa, or APMEA, division, McDonald’s said.
In a statement, president and chief executive Don Thompson said the global same-store sales increase, which lapped a 7.4-percent jump a year earlier, resulted from McDonald’s ongoing focus on its three priorities in its “Plan to Win”: menu optimization, modernizing restaurants and broadening accessibility to the brand.
“I am confident that these strategies and the actions we are taking will solidify our foundation and deliver long-term profitable growth in the future,” Thompson said.
In the United States, where same-store sales fell 2.2 percent in October, the November increase of 2.5 percent beat the expectations of several Wall Street analysts, who shared in research notes that they expected the figure to be flat to slightly negative.
Matthew DiFrisco of Lazard Capital Markets and David Tarantino of Robert W. Baird & Co. both wrote that initiatives underway at McDonald’s USA, including increased marketing spending around value messaging and good sales from the Cheddar Bacon Onion limited-time offer, as well as strength in, are showing early signs of traction.
“Breakfast may be benefitting from the gradual job recovery,” DiFrisco wrote. “The caveat of course is the fiscal cliff and the adverse impact this demographic would incur from the expiration of President Obama’s two-year reduction in the … payroll tax.”
Tarantino noted that he was cautiously optimistic for McDonald’s long-term potential, even though same-store sales figures in upcoming months face daunting comparisons to a year earlier, when they rose 9.8 percent, 7.8 percent and 11.1 percent, respectively, from December 2011 to February 2012.
“While comps and earnings could remain soft as McDonald’s cycles tough comparisons in December and the first quarter of 2013,” he wrote, “the November sales report supports our thesis that McDonald’s can achieve better performance in 2013 as a whole, with results aided by planned initiatives, fewer cost pressures and less negative currency translation.”
The November 2012 same-store sales increase of 1.4 percent in Europe compares to a 6.5-percent increase from a year earlier, the company said. McDonald’s credited the ongoing resilience of the United Kingdom and Russia for offsetting struggling markets, including Germany.
APMEA’s 0.6-percent increase last month faced the most difficult comparison from November 2011, when same-store sales increased 8.1 percent for the region. McDonald’s said positive results in Australia and other markets were largely offset by sales softness in Japan.
Bryan Elliott of Raymond James & Associates reported in a research note that same-store sales in November declined 3.1 percent in Japan, the country’s eighth consecutive month of sales decreases.
Still, Lazard Capital Markets' DiFrisco wrote that positive results in APMEA were encouraging. “Though management stopped short of explicitly calling out strength in China,” he added, “we suspect McDonald’s is taking share from peers, such as Yum! [Brands Inc., parent of KFC and Pizza Hut], through expanded value programs.”
Oak Brook, Ill.-based McDonald’s operates or franchises more than 34,000 restaurants worldwide.