McDonald’s July Same-Store Sales Rise 5.1% on Gains in China
McDonald’s Corp. (MCD), the world’s largest restaurant chain, said sales at stores open at least 13 months rose 5.1 percent in July as Chinese consumers dined out more.
Analysts projected a gain of 4.7 percent, the average of five estimates compiled by Bloomberg News. Sales in the U.S. advanced 4.4 percent, the Oak Brook, Illinois-based company said today in a statement. That trailed analysts’ estimates for a 4.9 percent increase.
Chief Executive Officer James Skinner may open as many as 200 stores in China this year to compete with Yum! Brands Inc.’s KFC and Pizza Hut chains. The company also may introduce its McCafe smoothie and beverage lineup around the world, Chief Operating Officer Donald Thompson said last month.
“McCafe is a huge opportunity for them in China,” said Peter Saleh, a restaurant analyst at Telsey Advisory Group in New York. McDonald’s is “gaining market share,” he said.
McDonald’s sales rose 5.3 percent in Europe and 4 percent in Asia, Africa and the Middle East. Analysts were expecting growth of 6.1 percent in Europe and 1.9 percent in Asia, Africa and the Middle East. Same-store sales in Japan fell 3.8 percent last month, the company reported earlier.
McDonald’s fell $2.97, or 3.5 percent, to $82.11 at 4 p.m. in New York Stock Exchange composite trading. The restaurant had gained 11 percent this year before today.
U.S. Sales
In the U.S., McCafe drinks and Chicken McNuggets fueled July sales, the company said. The U.S. same-store sales gain in July was the second-biggest monthly increase since November, trailing only June’s 6.9 percent gain.
Last month, McDonald’s said it expects 2011 commodity inflation will be as much as 4.5 percent in the U.S. and Europe. During the second quarter, restaurant margin at the chain’s company-operated stores narrowed to 19 percent from 19.9 percent a year earlier. Food prices may rise as much as 4 percent in the U.S. this year, the U.S. Department of Agriculture predicts.
“Everybody is raising prices,” Saleh said. “The question is, ‘Can they raise prices today and see their traffic hold six to eight months down the road?’”
June comparable-store sales increased 7.7 percent globally. Comparable, or same-store, sales are considered a key measure of a company’s growth because they exclude store openings and closings.
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
McDonald’s Same-Store Sales Rise 5.1% on China
Nelson Ching/Bloomberg
A McDonald's Corp. Big Mac hamburger is displayed at a restaurant in Beijing.
A McDonald's Corp. Big Mac hamburger is displayed at a restaurant in Beijing. Photographer: Nelson Ching/Bloomberg
McDonald’s July Same-Store Sales Rise 5.1%
Jin Lee/Bloomberg
McDonald’s sales rose 5.3 percent in Europe and 4 percent in Asia, Africa and the Middle East.
McDonald’s sales rose 5.3 percent in Europe and 4 percent in Asia, Africa and the Middle East. Photographer: Jin Lee/Bloomberg
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