The real burger king said same-store sales rose 3.7% in August, as the fast-food chain emphasized the value of its menu offerings amid the challenging global economy. McDonald’s strongest performance came from the region encompassing Asia, the Middle East and Africa, with revenue at stores open at least 13 months up 5.7%.
The company said the increase in that region was fuelled by a shift in the timing of Ramadan, which ran from late July to mid-August this year. It had fallen entirely in August last year. In Europe, which is McDonald’s biggest market and accounts for 40% of its business, the figure rose 3.1% on strength in the U.K., France and Russia. The company said its sponsorship of the London Olympics helped lift results. Another strong contributor was its Coca-Cola (KO) glass promotion, in which customers got a free glass and wristband when they bought an extra value meal or premium salad.
Analysts caution, however, that despite being off about 8% for the year-to-date and lagging the S&P 500 by more than 20 percentage points, McDonald’s still looks too pricey. Shares currently sport a forward P/E of 15.4, up from 14.4 a month ago. That’s currently in line with the stock’s own five-year average, despite entering a period of what looks to be slower earnings growth.
McDonald's (MCD : NYSE : US$91.20), Net Change: -0.10, % Change: -0.11%, Volume: 5,546,437