FAST food giant McDonald’s yesterday reported a bigger-than-expected 1.9 per cent increase in global sales at established restaurants in August, after a revival in France helped drive solid results in Europe, its top market.
Although the results from the world’s biggest fast-food chain soundly beat the average estimate of a 0.3 per cent increase from 16 analysts polled by Consensus Metrix, McDonald’s shares rose only slightly in New York.
McDonald’s had a big lead over rivals during the depths of the global recession. But chief executive Don Thompson recently has had to fight to maintain that distance as Burger King and Wendy’s tempt still-frugal diners with low-priced value menus.
Analysts maintained their cautious stance on McDonald’s, citing its continued dependence on Dollar Menu sales and uncertainty over whether new premium items such as Mighty Wings will draw customers.
“Given the company’s mixed results with premium platforms thus far this year, we are maintaining our current estimate for flat third-quarter sales at restaurants open at least 13 months,” Jefferies & Co analyst Andy Barish said in a client note.
McDonald’s said new premium wrap sandwiches and high-margin drinks such as blended smoothies and frappes helped bolster sales in Europe, where same-restaurant sales were up 3.3 per cent in August. Sales growth resumed in France during the month, and the firm also pointed to strength in the UK and Russia.
Analysts had expected a 0.1 percent fall for Europe, which just edges out the US as McDonald’s top market.