The best part of all…there are four new Chicken McNugget dipping sauces on the way!
McDonald's (MCD : NYSE : US$81.26), Net Change: 0.11, % Change: 0.14%, Volume: 4,539,721
McDonald’s May sales failed to impress investors, as U.S. comparable sales rose 2.4% while the Street was expecting 2.8% and European sales increased by 2.3%, well below the consensus estimate of 4.2%. However, Credit Suisse says that the results are better than they look. The
brokerage points out that Germany faced the toughest compare it will face in 2011 and that Germany, like Japan tends to have a choppier consumer, with month to month trends easily shifting with the effectiveness of promos.
While they are not worried about one month of weakness, they would caution that the E. coli scare could mean another month of weakness that has nothing to do with company fundamentals.
Regarding the U.S., the brokerage notes that severe weather in the south and parts of the mid-west clearly impacted trends in those regions and it was also a generally wet month across the country. Gas prices also appeared to have slightly impacted trends at the roughly 800 restaurant locations related to long-distance travel.
Looking at two-year trends, U.S. comps showed almost 200 bps of improvement, Europe was stable and global comps improved slightly. This continues to support Credit Suisse’s thesis that McDonald’s is well positioned for share gains for years to come given a positive feedback loop of comp investment and comp/average unit volume strength.
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