OAK BROOK ILL. McDonald’s Corp. clearly is running on all cylinders, analysts say, pointing to continued same-store sales gains, even in the face of a lackluster U.S. economy. And an increase in cash returned to shareholders through a record-setting dividend for the company has many investors saying, “I’m lovin’ it.” —
McDonald’s, boasting more than 30,000 locations, again cited breakfast, beverages and new menu offerings as drivers behind the sales surge. The chain’s 8.1-percent worldwide same-store sales increase in August was fueled by a 7.4-percent jump in the United States and an increase of 12.4 percent in the Asia/Pacific, Middle East and Africa region. —
U.S. sales have been rising despite a difficult consumer spending environment, which began to falter in late June as the subprime lending market imploded, leading to a weakened housing market, lowered consumer confidence and fears of recession. —
Most analysts predicted that McDonald’s would continue to post solid sales results despite these conditions, aided by product introductions like the Chipotle BBQ Snack Wrap and expanded market tests of Angus Third Pounder burgers and espresso and iced-coffee beverages. McDonald’s also is benefiting as consumers continue to “trade down,” choosing value-centric options over more expensive casual- or fine-dining choices, analysts contended. —
Jim Skinner, McDonald’s chief executive, credited a “customer-focused emphasis on menu variety and value, convenient service, innovative marketing, and contemporary restaurants.” —
After announcing its latest same-store sales jump and a 50-percent increase to its shareholder dividend to $1.50 per share—the largest in the company’s history—McDonald’s shares rose 6 percent to $54.30 per share on Sept. 13. That same day shares hit an all-time high of $54.68. —
The larger shareholder dividend, coupled with additional stock buybacks and an increased debt level, will help McDonald’s return between $15 billion and $17 billion to shareholders through 2009, the company said. This is a significant increase from the last commitment to return about $5.7 billion by 2008. —
