McDonald's US unit disappoints; Europe strong

09 Nov, 2010

McDonald's Corp reported a weaker-than-expected rise in October sales at US established restaurants as high unemployment keeps plaguing the world's largest hamburger chain's key domestic market. October sales at restaurants open at least 13 months were up 5.6 percent in the United States, but missed some analysts' estimates. Oppenheimer's Matthew DiFrisco, who had expected a 7.1 percent rise, said analysts on average had expected a 6 percent increase.
The US market accounts for about 35 percent of McDonald's revenue. Despite the macroeconomic weakness that has dented overall demand, the company has been taking US market share from rivals like No 2 hamburger chain Burger King, which is now private after its sale to 3G Capital.
Growth of 5.6 percent is "still one of the strongest numbers out there within fast food," DiFrisco said. Shares of McDonald's were down 0.3 percent in early trading. Overall, McDonald's reported a better-than-expected 6.5 percent rise in global October sales at established restaurants, as its low-price Dollar Menu and restaurant renovations helped draw more customers.

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