Published December 10, 2012
D – McDonald's Corp's sales at established restaurants rose more than expected in November as a renewed emphasis on low-priced food helped the company bounce back from a rare decline in October, it said on Monday.
Still, analysts said it was too early to say that the world's biggest restaurant chain, known for its french fries and Big Macs, had regained its strong lead over rivals.
"One month does not a trend make ... but it's a nice sign to see them rebound after a horrible October," ITG Investment Research analyst Steve West said.
McDonald's said global sales at restaurants open at least 13 months were up 2.4 percent in November, easily topping the tepid 0.17 percent increase expected by analysts polled by Consensus Metrix.
In October, McDonald's had its first monthly drop in the closely watched performance measure in nine years.
Analysts expect volatile industry sales in the coming quarters as nations around the world grapple with economic woes and high unemployment.
Profits could get squeezed as diners shop around for deals and restaurants respond by keeping prices low.
"We are concerned about the margin outlook in this more promotional environment," Lazard Capital Markets analyst Matthew DiFrisco said.
McDonald's business has softened in the United States, the company's second-largest market, as revived rivals like Wendy's Co and Burger King Worldwide Inc crank out tempting new premium and value products.
One week after McDonald's announced disappointing October sales, it replaced the president of its U.S. business, Jan Fields. Jeff Stratton, who had been the company's global restaurant officer, took over on Dec. 1.
U.S. sales at established restaurants rose 2.5 percent in November, while analysts had expected a small decline.
McDonald's attributed the results to breakfast, the Dollar Menu and its beverage menus. But it also said limited-time offerings like the cheddar, bacon and onion sandwich had bolstered sales.
Same-restaurant sales rose 1.4 percent in Europe, McDonald's biggest market, compared with calls for a 0.1 percent increase. Results were stronger in the UK and Russia, while Germany continued to be a drag.
Asia/Pacific, Middle East and Africa turned in a 0.6 percent increase, compared with the average forecast of a 0.9 percent decline.
McDonald's shares rose 0.8 percent to $89.22 in morning trading on the New York Stock Exchange.