) reported soft comps for the month of October. Though October
global comps edged up 0.5% year over year, they were down
compared to August comps of 1.9%. Global comps were down 1.8%
during the previous year.
Comps for the segment were up 0.2%, better than a decline of
2.2% in Oct 2012. The improvement reflects the impact of
limited-time offers for the popular Mighty Chicken Wings and
Pumpkin Spice Latte beverage and the introduction of the new
Premium Southwest McWrap. In the third quarter of 2013, results
of which were announced late last month, U.S. comps increased
Despite the challenging macroeconomic conditions, the region
experienced the highest comps growth of 0.8% driven by positive
performance in the U.K., France and Russia, which made up for
relatively lower comps in Germany and other markets.
Overall results in Europe were supported by the company's
attempts to fulfill demand via innovative value platforms and
incessant popular seasonal food events. Comps were up 0.2% during
the third quarter.
APMEA continued to underperform with comps down 2.8%, worse than
a 2.4% decline in Oct 2012. The downside primarily reflects lower
sales in Japan. Though the segment is continuously working to
improve performance by providing consistent value offerings,
accelerating growth in breakfast and leveraging brand extensions,
its year to date sales were down 1.8%. Meanwhile, the region is
experiencing higher labor and training costs due to new
restaurant openings in China. During the third quarter, the
region witnessed a 1.4% decline in comps.
McDonald's is working hard to continuously improve its top line
by providing a varied menu to its customers. It intends to
strengthen its domestic division by growing its everyday value
options and bringing a balance between these options and proven
However, decelerating growth in some regions of Asia, stiff
competition in the U.S. and less pricing power in Europe remain
matters of concern. The company presently has a short-term Zacks
Rank #3 (Hold).
Among the stocks worth considering in the space are
Buffalo Wild Wings Inc.
Bob Evans Farms Inc.
Burger King Worldwide Inc.
). While Buffalo Wild Wings carries a Zacks Rank #1 (Strong Buy),
Bob Evans Farms and Burger King Worldwide hold a Zacks Rank #2
BURGER KING WWD (BKW): Free Stock Analysis
BOB EVANS FARMS (BOBE): Free Stock Analysis
BUFFALO WLD WNG (BWLD): Free Stock Analysis
MCDONALDS CORP (MCD): Free Stock Analysis
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