McDonald’s May Store Sales Rise as U.S. Gains
McDonald’s Corp. (MCD), the world’s largest restaurant chain, said sales at stores open at least 13 months rose 2.6 percent last month, topping analysts’ estimates, as the Dollar Menu and breakfast items drove the U.S. business.
Analysts projected a 1.9 percent increase, the average of 17 estimates compiled by Consensus Metrix. Same-store sales in the U.S. advanced 2.4 percent, the Oak Brook, Illinois-based company said today in a statement. Analysts estimated a 2.1 percent gain.
McDonald’s this year has tried to lure Americans with a smattering of new items including chicken McWraps, different kinds of Quarter Pounder burgers and an egg-white sandwich. Chief Executive Officer Don Thompson said last month that the chain is doing “more aggressive” advertising focused on the menu. The U.S. sales jump marks an improvement from five straight months of sales drops or gains of less than 1 percent.
“The U.S. numbers were a little bit better than what people were expecting,” Peter Saleh, a New York-based analyst at Telsey Advisory Group, said in an interview. “They’re going to continue to roll out new products -- you’re going to probably see more beverages.”
U.S. sales were helped by breakfast, chicken items and “everyday value,” the company said in the statement. The new egg-white breakfast sandwich and Premium McWraps also fueled May sales.
Store sales rose 2 percent in Europe and 0.9 percent in Asia Pacific, the Middle East and Africa. Analysts estimated gains of 1.2 percent and 1.5 percent, respectively, according to Consensus Metrix, a researcher owned by Wayne, New Jersey-based Kaul Advisory Group.
McDonald’s is focused on selling favorites such as French fries, burgers and chicken McNuggets, and will also roll out new foods, Thompson said during an investor conference in New York on May 29.
“We’ve gotten our menu back front and center,” he said. “Our marketing is stronger, it’s more direct, it’s more aggressive.”
Other U.S. restaurant chains are ramping up new menu item introductions, too. Wendy’s Co. is selling flatbread chicken sandwiches, while Burger King Worldwide Inc. (BKW) last month rolled out a summer menu that includes a boneless rib sandwich, frozen lemonade and sweet-potato fries.
McDonald’s May same-store sales fell in China, the company said in the statement. Restaurants in the Asian nation have faced a consumer backlash against chicken products since the outbreak of avian flu earlier this year.
Yum! Brands Inc. (YUM), which owns KFC and Pizza Hut, last month said same-store sales tumbled 29 percent in April in China as customers there remained concerned that poultry may not be safe to eat. Yum, based in Louisville, Kentucky, is scheduled to report May store sales for China tomorrow.
Same-store sales at McDonald’s locations in Japan rose 0.5 percent in May, the first monthly increase since March 2012. Comparable, or same-store, sales are an indicator of a company’s growth because they include only older restaurants.
McDonald’s has about 34,500 stores worldwide, including more than 14,100 in the U.S. About 19 percent of locations are owned by the company.
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