Strong headline numbers belie the fact that promotional activity around new product introductions and trading day benefits masked the real issues at McDonald's in May. We continue to believe it will not be until July that we see what MCD normalized trends look like. Adjusted for the calendar/trading day impact, global comps actually registered a sequential deceleration in the two-year average trend.
MCD reported May global same-store sales growth of 2.6% versus 3.3% last year.
All the regional results showed positive same-store sales growth with the U.S. up 2.4% versus 4.4%; Europe up 2% versus 2.9%; and APMEA up 0.9% versus 1.7%.
The results benefitted from positive trade day variances of approximately 1% for the global business and between 0.6% and 1.4% for the balance of the regions.
The positive takeaway for the month is Europe, which reversed a string of 5 consecutive months of declining same-store sales. The strength in the U.K., and to a lesser degree Russia, continues to offset weakness in France and Germany as the comps become very difficult in June for many European markets.
U.S. same-store sales were better than our estimate, helped by the significant promotions following the introduction of the new Egg White Delight and, to a lesser degree, the McWrap.
APMEA posted slightly positive comps of 0.5%. Positive same-store sales were achieved on the back of better sales in Japan, offsetting declining sales in China, where Avian flu issues persist, and Australia.
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Howard Penney
Managing Director
Rory Green
Senior Analyst