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MCD’s global same-store sales results for August were, across the board, below expectations.

MCD global comparable sales growth in August was +3.5%.  By segment, U.S. comps were up +3.9% versus StreetAccount consensus of +4.7%, Europe comps were up +2.7% versus StreetAccount consensus of +5.5%, and APMEA comps declined -0.3% versus StreetAccount consensus of +3.9%.

The U.S. comparable sales number was a mere 10 basis points below expectations as the McCafé beverage line-up continues to drive strong sales.  Breakfast, including Fruit & Maple Oatmeal, and the new Premium Chicken sandwiches were also highlighted at strong points for the U.S. business.

MCD TRENDS DISAPPOINT IN AUGUST - mcd us august

As macroeconomic concerns weigh on confidence in the Eurozone, MCD’s performance has suffered in the region as evidenced by the +2.7% print for August.  This result implies the lowest two-year average comp (+2.5%) since December 2010 (2.3%) and the steepest sequential decline, of 285 bps, in the two-year average trend since August 2010.  The U.K. and Russia were highlighted as performance leaders in August.  Germany was included, alongside the U.K. and Russia, in the July release but was not mentioned in the August results.

MCD TRENDS DISAPPOINT IN AUGUST - mcd europe august

In APMEA, Japan sales weighed on the overall results.  Japan SSS declined -8.2% in August while China, Australia and other markets saw sales growth.  This was clearly a significant miss versus expectations and is likely a key reason why MCD share are trading down pre-market.

MCD TRENDS DISAPPOINT IN AUGUST - mcd apmea august

Howard Penney

Managing Director

Rory Green

Analyst