McDonald's: Sales Figures Like Groundhog Day

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Includes: MCD, SBUX
by: Todd Sullivan

Remember the movie "Groundhog Day"? Bill Murray keeps waking up and it is the same day over and over? This has become what reading McDonald's' (NYSE:MCD) monthly sales figure has become.

For February:

  • Same-store sales in the U.S. rose 8.3% during the month, led by breakfast and coffee offerings.
  • European same-store sales grew by an impressive 15.4% on strong results in the U.K., France, Germany and Russia.
  • Asia Pacific region, Middle East and Africa rose 10.9% for the month, mostly on strength in Australia, China and Japan.
  • Systemwide sales, which include restaurants owned by franchisees and affiliates operating under joint-venture agreements, rose 13.2% in February.

It is all about the two C's: coffee and convenience. I have been saying the same thing since Feb. of last year and nothing that has happened since then could lead anyone to think that things are due to change anytime soon. Is McDonald's going to become less convenient anytime soon? No. What are they going to do? Expand the coffee offerings. That can only lead to more interested people choosing to get their fix from Ronald & Crew at convenient locations at value prices.

Compare this to Starbucks (NASDAQ:SBUX) that has maintained the coffee, increased prices and diminished the convenience factor with the addition of sandwiches and micro locations that force you to wait in line outside. Any wonder the stock has cratered in the past year, down well over 50% since my first post on the subject?

Disclosure: Long MCD.