Lost in the Lehman (LEH), Apple (AAPL) and Oil (USO) hysteria yesterday was the fact McDonald’s (MCD) turned in another undeniably fantastic month.
McDonald’s said on Monday that global sales in May were up a whopping 7.7% at established restaurants. Same-store sales, rose 4.3% at American McDonald’s restaurants open at least 13 months.
Analysts’ average call was for an increase of 1%. Same-store sales rose 9.6% in Europe, led by strength in Britain, France and Russia, and 9.7% in the Asia/Pacific, Middle East and Africa division.
McDonald’s Chief Executive Officer Jim Skinner said, “We’re committed to providing our customers with compelling value, unique menu variety and unparalleled convenience. Our steadfast focus on the customer experience and our alignment behind the Plan to Win continue to deliver positive results worldwide.”
Anyone want to bet they surpass analyst estimates for Q2 results on July 23, 2008?
Would I run out an buy shares now? At 27 times current EPS and almost 16 next year, I would say not really. If I owned them would I sell? I do, I will not be. I intend to ride the wave here much longer. I do not see conditions occurring either in the economy or in their industry in terms of competition that would cause the momentum they have to unwind.
I expect their value proposition to remain enticing for customers as the economy stays sluggish for quit some time and the competition, well, they are simply trying to catch up now.
Disclosure (“none” means no position):Long MCD
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