No Smiles for McDonald's: February Sales Numbers Miss the Mark – ValueWalk Premium

No Smiles for McDonald's: February Sales Numbers Miss the Mark

No Smiles for McDonald's: February Sales Numbers Miss the Mark

On Thursday, McDonald’s reported its monthly report and said that it missed its February global sales number.

McDonald’s (NYSE:MCD) saw a 7.5 percent rise in February sales at its global restaurants (open a minimum of 13 months). This came in below analysts estimates between 7.7 percent and 8.2 percent.

Europe, which is second to the United States in revenue, reported a sales increase of four percent. This also come in below analyst forecasts for a more than six percent rise.

These numbers came from established restaurants and the company said that the weakness in Europe along with “economic uncertainty” could affect its growth in profits. Previously, the company was able to stay ahead of its peers with declining numbers but not this time.

Cold weather also hurt the region but Britain and Russia had good numbers.

The market reacted with a dive in the company’s share price by three percent to $97.03 while McDonald’s responded in a statement, “These challenges are expected to impact the company’s first-quarter operating income growth.”

One analyst did not appear surprised by the weather’s effect. Janney Capital Markets analyst Mark Kalinowski said, “We think Wall Street was underestimating the effect of the cold snap in Europe. He had also anticipated European same-restaurant February sales to increase 5 percent and has a “Buy” rating on McDonald’s.

In McDonald’s other regions, sales numbers also came up short. For Asia/Pacific, the Middle East and Africa unit, sales increased 2.4 percent, missing analysts’ estimates for an eight percent rise.

Japan, still in recovery mode from its earthquake and tsunami, saw a 1.2 percent February decline for same-restaurant sales.  Also seeing a decline was China after the changed date for the Chinese New Year affected numbers in the region.

One bright spot? The United State reported that its same-restaurant sales rose 11.1 percent, exceeding the estimated eight percent rise by analysts. Sales rose from McDonald’s offerings that included Chicken McBites, drinks, breakfast and the Filet-O-Fish, reported Reuters.

According to analysts, these numbers also shed light on the increasing market share for U.S. McDonald’s. Its wide menu with Angus burgers and $1 hamburgers, espresso drinks, and salads appeal to a broad number of customers. The company also buys in large sizes, which enabled them to negotiate food costs and other offerings more so than its competitors.

Looking ahead, McDonald’s does not provide quarterly earnings guidance, according to Reuters.


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