McDonald's Keeps Gaining
It's not a big surprise that McDonald's (MCD) first-quarter earnings beat Street estimates on Apr. 22. The fast-food chain is expected to thrive in a recessionary economy where diners are looking to cut costs. But surprisingly, the gains aren't necessarily coming from the cheapest items on its menu—the $1 specials. More important, says CEO James A. Skinner, McDonald's is doing a good job stealing business from higher-priced competitors such as Starbucks (SBUX) and selling those customers higher-margin items, such as espresso-based coffees and Snack Wraps, that are seen as comparative bargains.
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