) investors reacted favorably to its first-quarter results,
bidding up the stock after the burger chain reported profits
gained 5% and same-store sales - a key measure of growth - gained
7.3% in the quarter.
Net income hit $1.27 billion, or $1.23 per share, for the
quarter ended March 31. Revenue gained 7.1% to $6.55.
The stock movement is in some contrast to last month. The
stock came under a little pressure when a gain of 7.5% in
comparable sales in February was viewed as a disappointment. The
what-have-you-done-for-us-lately crowd should keep in mind
McDonald's amazing, long-term performance: per-store sales leapt
50% from 2004 to 2010, from $1.6 million to $2.4 million, as part
of the turnaround overseen by soon-to-retire CEO Jim Skinner. And
they've kept growing since.
turned McDonald's into one of the great grind-it-out companies,
and a culture of incremental improvement - see Wells Fargo (
) and Southwest Airlines (
) - should be among the most comforting attributes for
Despite Friday's showing, McDonald's stock continues to trail
rivals YUM (
), Starbucks (
), Chipotle Mexican Grill (
) and the broader market so far this year. But that gap may not
last for long.
YUM!'s same-store sales for the first quarter, which ended
March 24, shot up 14% in China, where its KFC unit is dominant.
China is key to YUM's growth, given its U.S. operations have
languished and comparable sales gained only 5% in the first
In contrast, same-store sales at McDonald's U.S. operations
gained 8.9% in the first quarter.
Starbucks will let us know how it's doing next Thursday, but
it too has been looking to China to boost growth. And China's
economy is slowing. The most recent numbers from Starbucks, which
are for its first quarter which ended Jan. 1, show global
comparable sales up 9%.
Chipotle said its same-store sales gained 12.7% in the first
quarter as it continues to be a restaurant juggernaut. Sales rose
26% in the quarter while net income rose 35%.
has been lagging these rivals for the past several years.
MCD Revenues TTM
But new McDonald's CEO-elect Don Thompson is inheriting a well
run company when he takes the reins from Skinner this summer. It
MCD Profit Margin
It's still the cheapest of the group, as shown by
MCD PE Ratio
yield of about 3% is very respectable, and it pays out more of
its earnings to shareholders than Starbucks or YUM.
MCD Payout Ratio TTM
Michael McHugh is an editor for the
YCharts Pro Investor Service
which includes professional