July sales at McDonald’s Corp. (NYSE: MCD) jumped 7% globally and were up sharply in each of the company’s three regions. Now that Ronald McDonald is no longer threatened with being fired, he’s turning up the heat on the company’s competitors, Burger King Corp. (NYSE: BKC), Wendy’s/Arby’s Group Inc. (NYSE: WEN) and Yum! Brands Inc. (NYSE: YUM).
More accurately, he’s turning on the spigots in the U.S., the premium menu items in Europe and the value menu in the rest of the world. U.S. same-store sales popped 5.7%, more than double the 2.6% increase in July 2009. The fruit smoothies, frappes and low-priced beverages were especially called out as top contributors to the surge.
European sales were up 5.3% in July, down significantly from the 7.2% rise a year ago. The company attributes this year’s rise to its “unique premium menu offerings” and an enhanced McDonald’s experience. Making its stores more attractive to customers has been a particular concern in the U.K., where a three-year re-imaging of the restaurants has paid off by lifting sales 10% in 2008 and 11% in 2009.
In the company’s Asia/Pacific, Middle East and Africa region, same-store sales in July skyrocketed by 10.1%. In July 2009, sales grew 2.1%. McDonald’s gives the credit to “innovative value offerings, menu variety and breakfast.” Primarily, though, McDonald’s continued focus on China is almost certainly the main profit driver. When the company reported second quarter earnings, this segment posted operating income growth of 19%, more than double European growth and nearly triple U.S. growth. There’s little reason to think the company’s focus on China will shift anytime soon.
MCD shares are up slightly in pre-open trading this morning.
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