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McDonald's global same-store sales rise 0.5% in November

McDonald's global same-store sales rise 0.5% in November

Strong performance in Europe again offsets weakness in U.S. and Asia

McDonald’s Corp. reported a 0.5-percent increase in global same-store sales for the month of November, as the company’s European division’s relatively strong sales growth offset weakness in the United States and Asia for the third time in the past four months.

Same-store sales in the United States, where Oak Brook, Ill.-based McDonald’s has more than 14,000 locations, fell 0.8 percent in November. The result, which several securities analysts wrote fell below expectations, lapped a 2.5-percent gain in November 2012.

In a statement, McDonald’s cited “ongoing competitive activity and relatively flat industry traffic trends” for its domestic result.

The chain rolled out its Dollar Menu & More platform systemwide Nov. 4, and advertising for the tiered value menu began Nov. 11.

Europe was a bright spot for McDonald’s in November. The division reported a 1.9-percent increase in same-store sales, with performance in the United Kingdom, France and Russia continuing to offset declining sales in Germany, the fourth major market in Europe that has struggled for much of the year. Europe also led the company’s sales growth in October and August of this year, including a 3.3-percent gain in the latter month.

Japan’s struggles weighed down results in McDonald’s Asia/Pacific, Middle East and Africa, or APMEA, segment. Same-store sales in APMEA fell 2.3 percent, due in large part to a 10.4-percent decrease in Japan.

The company noted that comprehensive strategies across the business, from menu innovation and marketing to customer service and operations, would be important in coming months, just as the company noted in its biannual investor meeting last month. In the United States, those plans include promoting the Dollar Menu & More, as well as adopting new kitchen equipment to speed up throughput and allow customization, and continuing to test digital marketing and mobile payment solutions.

Despite November results falling below his firm’s projections for the United States and APMEA, securities analyst David Tarantino of Robert W. Baird & Co. wrote in a research note that McDonald’s could start recovering momentum early next year.

“Although November comps were uninspiring, we are cautiously optimistic that better trends can emerge in 2014,” he wrote, “and with expectations seemingly low, we suspect any signs of better comps in upcoming periods would support improved investor sentiment. … We are cautiously optimistic that planned internal initiatives like menu innovation and revamped marketing and operations, and possibly improved economic conditions, can support gradually improving fundamentals.”

McDonald’s operates or franchises approximately 35,000 restaurants in more than 100 countries.

Contact Mark Brandau at [email protected].
Follow him on Twitter: @Mark_from_NRN

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