McDonald's Gets Its Groove Back
That didn't take long. Just a month after suffering its first drop in comparable sales in nine years, McDonald's returned to growth in November.
Global sales bounced back, improving from a nearly 2% decline the month before to notch a 2.4% increase this time. The positive trends between October and last month also showed up in all three of the company's sales regions:
Asia/Pacific, Middle East, Africa
Analysts were expecting total growth of about 0.1%, with global results projected to be hit by another fall in U.S. sales. The national restaurant industry has been in a bit of a funk, after all. And even Chipotle turned in a an uncharacteristic 5% sales gain in Q3 and warned that cautious consumers could hurt results.
But instead of back-to-back drops, McDonald's delivered a healthy 2.5% bump in U.S. revenue. That has to have the new head of the company's U.S. division, Jeff Stratton, breathing a little easier. He took the reins just after domestic sales tanked, amid warnings of a depressing new normal in the global competitive environment.
Yet the monthly sales report wasn't uniformly positive. The most disappointing figure was the sub-1% sales rise in McDonald's Asia/Pacific region. That compares poorly with the 8.1% jump in the year-ago quarter and points to a longer-term trend of cooling sales in that region. McDonald's Asia/Pacific market is the company's worst-performing area so far this year. But the company isn't alone there. Competitor Yum! Brands just warned about softer sales in China, too, and said it expects Q4 sales growth to be negative in the country, after logging a whopping 21% gain in Q4 of last year.
Monthly sales figures aren't the best judge of business performance, as they can be volatile and dominated by short-term factors. In November, for example, McDonald's benefited from the limited-time offering of its cheddar bacon onion sandwich. The company's December results should enjoy a similar bounce as the uber-popular McRib sandwich returns for its yearly run on the menu.
Still, McDonald's turned in a solid report with improvements across all regions. And, given October's terrible numbers and the leadership change in November, a lot was riding on this month's report. A return to growth at McDonald's means investors don't have to worry that the bottom is falling out from under the company's domestic sales. In the U.S and overseas, McDonald's still has it.
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The article McDonald's Gets Its Groove Back originally appeared on Fool.com.Fool contributor Demitrios Kalogeropoulos owns shares of McDonald's. The Motley Fool owns shares of Chipotle Mexican Grill and McDonald's. Motley Fool newsletter services recommend Chipotle Mexican Grill and McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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