Comps have accelerated through the summer for MCD and I wouldn’t bet on them slowing down in August.
Sales of frappes and smoothies at McDonald’s restaurants have performed well throughout the summer and continue to do so. Smoothies in particular have created tremendous noise in the market. Earlier this month, the release detailing July sales underlined frappes and smoothies as top contributors to the month’s 5.7% print in the U.S. market. Based on current sales trends for frappes and smoothies, I expect two year average sales trends in the U.S. to accelerate in August on a sequential basis. Taking calendar shifts into consideration, I would not be surprised to see McDonald’s USA print a 6 to 7% comparable restaurant sales number for August. Globally, there is a chance that July’s 7% figure could be exceeded in August.
Additionally, news has emerged that McDonald’s is testing a new line of products – Chicken Flatbread Sandwiches – in the Baltimore market. If successful, this product could provide needed support for sales trends in the lagging lunch day part.
Howard Penney
Managing Director
