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McDonald's Reports Increased April Sales

By RTTNews Staff Writer   ✉  | Published:  | Google News Follow Us  | Join Us
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Fast-food chain McDonald's Corp. (MCD) reported Monday a 4.9% increase in comparable sales for the month of April, helped by strong sales growth in all three regions. In the month, the Oak Brook, Illinois-based company's systemwide sales rose 10.3%, or 6.4% in constant currencies.

McDonald's, the world's leading hamburger chain and a Dow component, reported that global comparable sales, which represents sales at all restaurants in operation for at least thirteen months, was up 4.9% in April 2010, on top of a 6.9% increase a year ago.

In the U.S., comparable sales rose 3.8% in April as the company remains a relevant and affordable choice for consumers, while the region's prior-year sales growth was 6.1%. According to the company, the strong results were driven by beverages, including new McCafe offerings like Frappes, core products like Chicken McNuggets, and an all-day, everyday value message that starts with the Dollar Menu at breakfast.

In Europe, April comparable sales increased 5.3% led by positive sales growth in France, the U.K., Germany and Russia, compared to last year's sales growth of 6.5%. McDonald's said its business in the region continues to benefit from customer-focused strategies around menu choice, everyday affordability and restaurant reimaging.

Comparable sales were up 3.9% in Asia/Pacific, Middle East and Africa or APMEA driven by performance in Australia and many other markets. The results also reflected extended value programs, locally-relevant menu variety, convenience and service enhancements.

The company's systemwide sales in the U.S. increased 4.5%, and the sales growth in Europe, on a reported basis, was 11.5% and at constant currency was 7.5%. APMEA recorded a 17.5% jump in systemwide sales, and the growth was 6.3% at constant currency.

Commenting on the sales results, McDonald's Chief Executive Officer Jim Skinner said, "McDonald's continues to connect with customers through our outstanding menu variety and compelling value, unbeatable convenience and contemporary restaurants. These competitive advantages have powered our ongoing momentum and delivered another month of strong sales performance."

While announcing the first quarter results back on April 21, Skinner had said that the company's momentum continues with April's global comparable sales trending at least as strong as first quarter sales. In the first quarter, McDonald's global comparable sales increased 4.2%, with the U.S. up 1.5%, Europe up 5.2% and APMEA up 5.7%. Total revenues in the first quarter increased 10% to $5.61 billion, with 9% growth in sales by company-operated restaurants to $3.80 billion, and 13% increase in revenues from franchised restaurants to $1.81 billion.

McDonald's operates more than 32,000 local restaurants in more than 100 countries, with over 80% of McDonald's restaurants worldwide owned and operated by franchisees.

For the year-to-date period ended April 30, the company's comparable sales rose 4.4% on top of a 5% increase a year ago. U.S. sales grew 2.1%, and sales at Europe as well as APMEA rose 5.3%.

Systemwide sales for the year-to-date period rose 10.6% or 6% in constant currencies. In the U.S., systemwide sales increased 2.7%, and the sales growth in Europe, on a reported basis, was 14.4% and at constant currency was 7.5%. APMEA recorded a 18.7% increase in systemwide sales, and the growth was 8% at constant currency.

Among others in the industry, Yum! Brands, Inc. (YUM) in mid-April reported a 6% growth in first-quarter revenues to $2.35 billion, as strong growth in China helped offset weakness in its U.S. operations. The Louisville, Kentucky-based restaurant chains operator reported that company sales increased 4% to $2.0 billion, while franchise and license fees and income grew 17% to $349 million.

Yum! Brands' U.S. Division's revenues fell 11% in the quarter, and U.S. division's same-store sales declined 1% including an increase of 5% at Pizza Hut and declines of 2% at Taco Bell and 4% at KFC. However, China division's total revenues rose 24%, and International revenues grew 12%.

Burger King Holdings Inc. (BKC) recently reported a 1% drop in third-quarter worldwide revenues to $596.9 million, as revenues from U.S and Canada dipped, reflecting the adverse weather in the first two months of the year and lower levels of guest spending due to value promotions in the U.S. Company restaurant sales fell 2% to $439.2 million, while franchise revenues advanced 4% to $129.9 million.

Region-wise, Burger King's U.S and Canada revenues declined 4%, while revenues at the EMEA/APAC region grew 8% and Latin America revenues grew 10%. The company said worldwide comparable sales declined 3.7%, with 6.1% decline in U.S. and Canada comparable sales.

MCD is currently trading at $70.34, up $2.33 or 3.43%, on a volume of 1.6 million shares. In the past 52 weeks, shares have been trading between $53.04 and $71.84.

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