Conclusion: The MCD quarter was clean across the board.
September Sales Trends - up 6.1% globally:
- US accelerated about 40 bps on a two-year average basis (adjusted for calendar shifts)…off of a strong month
- Europe two-year average trends improved about 210 bps off of a weak August
- APMEA improved about 120 bps, also off of a weak August
Notable trend - US margins continue to be on a roll…peak in sight? US margins are up more than 200 bps YOY each quarter this year….up 270 bps in 3Q10 (7th quarter of growing margins…prior to that, 8 quarters of declines).
Changes to the Outlook section were minor and there was no commentary on 2011:
Systemwide Sales:
2Q10: The Company expects net restaurant additions to add 1.5 to 2 percentage points to 2010
3Q10: The Company expects net restaurant additions to add nearly 1.5 percentage points to 2010
Inflation:
2Q10 - For the full year 2010, the total basket of goods cost is expected to decrease 3-4% in the U.S. and to decrease 1-2% in Europe.
3Q10 - For the full year 2010, the total basket of goods cost is expected to decrease 3-4% in the U.S. and to decrease 2-3% in Europe, reflecting favorable comparisons in the first nine months of this year.
Capex and unit growth:
2Q10 - The Company expects capital expenditures for 2010 to be approximately $2.4 billion. About half of this amount will be reinvested in existing restaurants, including the reimaging of over 2,000 locations worldwide. The Company expects net additions of about 325 restaurants, which reflects the strategic closing of restaurants by McDonald’s Japan.
3Q10 - The Company expects capital expenditures for 2010 to be approximately $2.3 billion. About half of this amount will be reinvested in existing restaurants, including the reimaging of approximately 1,800 locations worldwide. The Company expects net additions of about 275 restaurants, which reflects the strategic closing of restaurants by McDonald’s Japan.
Howard Penney
Managing Director
