News
McDonald's sales weaken for February
March 8, 2009
OAK BROOK, Ill. — McDonald's February comparable sales results were negatively impacted by the 2008 leap year and an extra day of operations, the company has announced. Global comparable sales increased 1.4 percent, reflecting the negative calendar shift. Excluding this negative calendar shift of about 4 percentage points, comparable sales were positive for all segments and global comps were up approximately 5.4 percent.
In January, global comps increased 7.1 percent. Systemwide sales for McDonald's worldwide restaurants were up 2.6 percent for January, or 9.1 percent in constant currencies.
February comps by region include:
- U.S. comps increased 2.8 percent; up 6.8 percent excluding the segment's calendar shift
- Europe decreased 0.2 percent, or increased 4.0 percent excluding the segment's calendar shift
- Asia/Pacific, Middle East and Africa increased 0.7 percent; up 4.1 percent excluding the segment's calendar shift
Systemwide sales for McDonald's worldwide restaurants declined 4.6 percent for the month, but increased 3.2 percent in constant currencies.
U.S. comps were strengthened by the chain's chicken line-up, its core menu — particularly the Quarter Pounder — beverages and breakfast.
In Europe, the chain's unique premium menu offerings and compelling value contributed to sales growth, led by the United Kingdom and Russia, partly offset by Germany.
In Asia/Pacific, Middle East and Africa, comps were driven by strong results in Australia and Japan, partly offset by China. China's weak February comparable sales were due in part to the celebration of the Chinese New Year in January 2009 versus February in 2008.
First quarter impacts
External factors, including unprecedented volatility in foreign currency exchange rates and commodity costs, will continue to pressure revenue and margin comparisons in the first quarter. Weaker foreign currencies, including a significant decline in the Eastern European currencies where McDonald's primarily operates company-owned restaurants, are expected to negatively impact results.
If foreign currency rates remain at current levels, currency translation is expected to negatively impact first quarter revenues by at least $600 million and earnings by 7 to 9 cents per share. In addition, as previously stated, commodity cost pressures are expected to have a greater impact during the first half of the year.
First quarter 2009 results will include an after-tax nonoperating gain of approximately 3 to 4 cents per share resulting from the sale of McDonald's minority interest in Redbox Automated Retail LLC, the company's last non-McDonald's venture.
McDonald's effective tax rate for the first quarter is expected to be 28 percent to 29 percent, and the company's annual tax rate is expected to be 29 percent to 31 percent.
McDonald's tentatively plans to release first quarter results before the market opens April 22 and will host an investor webcast. The webcast will be broadcast live and available for replay for a limited time onwww.investor.mcdonalds.com.
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