(MCD) McDonald’s Report Shows Sales on the Rise

McDonald’s Corporation’s (MCD) comparable sales are on the rise. Although diners are now becoming more comfortable spending as the economy eases, but are still seeking value menu offerings. The fast food restaurant operator has witnessed an uptrend across its domestic and international markets.

Global comparable-store sales climbed 4.9% in April 2010 compared to an increase of 6.9% in the same month last year. McDonald’s opined that system-wide sales at worldwide restaurants surged 10.3% in the month under review. However, in constant currencies, the rate of increase in system-wide sales softened to 6.4%.

The world’s largest hamburger chain, McDonald’s, said that the new menu offerings, which include value-based drinks, frappes, Chicken McNuggets and the McCafe premium coffee line-up, have helped boost the U.S. comparable-store sales. The company also began offering its Breakfast Dollar Menu to boost sales, as heavy job losses have taken their toll on restaurant traffic in the mornings.

McDonald’s, which faces stiff competition from Burger King Holdings Inc. (BKC) and Yum! Brands Inc. (YUM) said that the U.S. comparable sales grew 3.8% in April (versus a 6.1% increase last year for the comparable month).

In Europe, comparable sales climbed 5.3% in April (versus an 8.4% increase last year for the comparable month) fueled by strong performance in the U.K., France, Germany and Russia. Sustained focus on core value menu offerings, and restaurant re-imaging program continued to drive gains.

Comparable sales in Asia/Pacific, Middle East and Africa (APMEA) jumped 3.9% in April (versus a 6.5% rise last year for the comparable month) led by performance in Australia and other markets.

We think McDonald’s provides relative safety for the investor, with moderate growth prospects, being exposed to faster-growing international markets. McDonald’s currently operates more than 32,000 restaurants in more than 100 countries.

Zacks Investment Research

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