Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

McDonald's Corp. (MCD - Analyst Report) reported soft comps for the month of October. Though October global comps edged up 0.5% year over year, they were down compared to August comps of 1.9%. Global comps were down 1.8% during the previous year.

U.S.

Comps for the segment were up 0.2%, better than a decline of 2.2% in Oct 2012. The improvement reflects the impact of limited-time offers for the popular Mighty Chicken Wings and Pumpkin Spice Latte beverage and the introduction of the new Premium Southwest McWrap. In the third quarter of 2013, results of which were announced late last month, U.S. comps increased 0.7%.

Europe

Despite the challenging macroeconomic conditions, the region experienced the highest comps growth of 0.8% driven by positive performance in the U.K., France and Russia, which made up for relatively lower comps in Germany and other markets.

Overall results in Europe were supported by the company’s attempts to fulfill demand via innovative value platforms and incessant popular seasonal food events. Comps were up 0.2% during the third quarter.

APMEA

APMEA continued to underperform with comps down 2.8%, worse than a 2.4% decline in Oct 2012. The downside primarily reflects lower sales in Japan. Though the segment is continuously working to improve performance by providing consistent value offerings, accelerating growth in breakfast and leveraging brand extensions, its year to date sales were down 1.8%. Meanwhile, the region is experiencing higher labor and training costs due to new restaurant openings in China. During the third quarter, the region witnessed a 1.4% decline in comps.

Our Take

McDonald's is working hard to continuously improve its top line by providing a varied menu to its customers. It intends to strengthen its domestic division by growing its everyday value options and bringing a balance between these options and proven core favorites.

However, decelerating growth in some regions of Asia, stiff competition in the U.S. and less pricing power in Europe remain matters of concern. The company presently has a short-term Zacks Rank #3 (Hold).

Among the stocks worth considering in the space are Buffalo Wild Wings Inc. (BWLD - Analyst Report), Bob Evans Farms Inc. (BOBE - Snapshot Report) and Burger King Worldwide Inc. (BKW - Analyst Report). While Buffalo Wild Wings carries a Zacks Rank #1 (Strong Buy), Bob Evans Farms and Burger King Worldwide hold a Zacks Rank #2 (Buy).

 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
LAKE SHORE G LSG 0.77 +6.05%
QUESTCOR PHA QCOR 80.07 +2.47%
VIPSHOP HOLD VIPS 156.35 +1.82%
ENLINK MIDST ENLC 36.29 +1.60%
BNC BANCORP BNCN 17.33 +1.58%