Wednesday, September 12, 2012

McDonald's rebounds from mid-summer slump

Jim Yin, S&P Capital IQ analyst, and R.J. Hottovy, Morningstar analyst, break down the same store sales numbers for McDonald's, and discuss the outlook on the company, despite higher food prices.

By Roland Jones, NBC News

Is McDonald?s bouncing back?

The world's biggest hamburger chain reported its worst month for sales in more than nine years in July.

But on Tuesday the fast-food chain said its sales rebounded in August after it used low-cost menus to take market share back from resurgent rivals such as Burger King and Wendy?s.

McDonald's had flat same-restaurant sales around the world last month, but they perked up in August. Sales in the U.S. were up 3 percent, in Europe they rose 3.1 percent and they jumped 5.7 percent in the Asia/Pacific, Middle East and Africa region.

R.J. Hottovy, a Morningstar analyst, said McDonald?s is regaining its footing and dealing with a shift toward its dollar menu, which reduces revenue, and also stronger completion from peers that have lagged the company in the past.

The fast-food giant is also dealing with a ?choppy consumer spending environment,? he told CNBC Tuesday. ?So chalking up all three of those factors is what you?re seeing in the numbers.?

Hottovy also said the company has a nice product pipeline for 2013, but is worried about the threat of higher food costs.

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Source: http://marketday.nbcnews.com/_news/2012/09/11/13807590-mcdonalds-rebounds-from-mid-summer-slump?lite

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