McDonald’s global same-store sales rise 1.2% in January

Harsh winter weather and several trade-day shifts produced mixed results for McDonald’s Corp.’s same-store sales in January, which rose 1.2 percent globally.

Unlike most months in 2013, McDonald’s Asia/Pacific, Middle East and Africa, or APMEA, division performed better than expected, leading the company’s results. Meanwhile, the chain’s U.S. division lagged far behind the other areas of the world for the second consecutive month.

In the United States, McDonald’s comparable sales fell 3.3 percent, which the company attributed to “broad-based challenges, including severe winter weather.” The domestic same-store sales figure improved slightly from the 3.8-percent decline McDonald’s reported in December 2013, though several securities analysts noted that the U.S. division benefited from a trading day shift that added 1.3 percent to the result.

Black Box Intelligence and People Report found that the polar vortex, which brought days of record snowfall and sub-zero temperatures in many parts of the country, weakened consumer spending across the entire restaurant industry in January.

David Tarantino of Robert W. Baird & Co. estimated that the weather dragged McDonald’s same-store sales down 2 percent in January, while “some execution issues and heightened competitive activity also may have weighed on McDonald’s relative performance, offsetting other internal drivers like Dollar Menu & More advertising.”

Same-store sales in Europe rose 2 percent in January. The company said positive sales in the United Kingdom and France offset continued weakness in Germany.

“Overall, the European segment has continued its momentum over the past few months,” Sterne Agee securities analyst Lynne Collier wrote in a research note.

Collier estimated that Europe’s sales gained 1 percent from a beneficial trade day adjustment. The division’s same-store sales have been negative only twice in the past nine months.

APMEA’s comparable sales leapt 5.4 percent, its first positive monthly result since June 2013. Analysts estimated that the division’s result, lapping a 9.5-percent decrease from January 2013, included a 0.4-percent trade-day benefit that included the timing for Chinese New Year.

McDonald’s Corp. said China’s positive results also reflected the company lapping the country’s extremely weak performance a year earlier, when concerns and negative publicity about China’s supply of poultry depressed sales for McDonald’s, KFC and other restaurant brands.

Tarantino also noted that APMEA’s performance “reflected a sharp bounce back in Japan,” where a 3.4-percent monthly same-store sales gain followed a 9-percent decrease for December 2013 and a 9.7-percent decline for the fourth quarter. He estimated that sales improved between 6 percent and 7 percent throughout the rest of APMEA.

Oak Brook, Ill.-based McDonald’s operates or franchises nearly 35,000 restaurants in more than 100 countries, including more than 14,000 locations in the United States.

Contact Mark Brandau at [email protected].
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