Cold, Crappy Food Sales Down

[Made in the USA]

U.S. sales slowdown hits McDonald's
By DAVE CARPENTER
AP Business Writer


CHICAGO - McDonald's Corp. served notice Monday that sales at U.S. restaurants open at least a year were flat last month as consumers tightened their wallets, heightening concerns on Wall Street even as it reported fourth-quarter profits of $1.27 billion. Its stock fell sharply.

The world's largest fast-food chain cited severe winter weather as the primary reason for the weakness in U.S. comparable sales, which were more than offset by international sales gains.

But investors worried about the impact of a possible recession overlooked the impressive fourth-quarter results, which capped a strong year for McDonald's, focused instead on slowing sales and sold McDonald's stock heavily.

Shares in the Oak Brook, Ill.-based company, already down 7 percent since the first evidence of a December sales slowdown surfaced two weeks ago, shed another $3.63, or 6.7 percent, to $50.47 in afternoon trading.

"Weak U.S. trends are likely to put some pressure on the stock until investors have a sense of whether December was a one-month outlier or a new trend," RBC Capital Markets analyst Larry Miller said in a note to investors.

Net income for the October-through-December period amounted to $1.06 per share, up from $1.24 billion, or $1 per share, during the same period a year earlier.

Excluding income tax benefits of 33 cents per share, the company earned 73 cents per share, beating analysts' consensus estimate of 71 cents per share, according to a Thomson Financial poll.

Revenue rose 6 percent to $5.75 billion from $5.45 billion in the fourth quarter of 2006, also topping Wall Street's $5.61 billion estimate.

Global same-store sales rose 6.7 percent for the quarter.

Despite the December weakness, CEO Jim Skinner said the company remained confident in its U.S. business - its biggest market with close to 14,000 restaurants. U.S. comparable sales have risen for 19 consecutive quarters, and Skinner said January sales should be up about 1.5 percent.

"While we generate better results in a booming economy like everyone else, we've navigated through tough times before and we're confident that we can do it again," he said on a conference call. "Our best estimate on the economy is that it will impact our business by 1 to 2 percentage points in the U.S., on a same-store sales trend line, while the current economic environment exists."

He said the company has seen a slight shift to more value menu items, but not outside its historical December range.

For the full year, McDonald's profits fell 32 percent to $2.4 billion, or $1.98 per share, from $3.5 billion, or $2.83 per share, a year earlier. Revenue climbed 9 percent to $22.8 billion from $20.9 billion. The full-year results were weighed down by a hefty one-time charge for the sale of some Latin American operations.

Also Monday, McDonald's said it would also begin to pay dividends quarterly.

[Sherry_Giskie]

You think the loss might be because more people have finally decided to stop eating CRAP and get healthy?!?

[Made in the USA]

Anybody that wants to pay 5 bucks for a cup of coffee, I will be glad to sell you one! Hell, I'll even charge 7 bucks, if that makes it any better!

[Bubba]

I thought they put, or are putting, Starbucks inside the A&W on 14th?!?!?!

[jeezeweeze]

Originally Posted by Made in the USA

Anybody that wants to pay 5 bucks for a cup of coffee, I will be glad to sell you one! Hell, I'll even charge 7 bucks, if that makes it any better!

[TexKan]

I tried Micky D's Latte and ya know it's not bad. We have more Starbucks than we need and I look for a few to close since they are stream lining thier company. Sonic has a good Java Chiller but I think Micky's got em beat. Plus I think it's a buck 69 - can't beat that!

[Outofdodge]

Originally Posted by TexKan

I tried Micky D's Latte and ya know it's not bad. We have more Starbucks than we need and I look for a few to close since they are stream lining thier company. Sonic has a good Java Chiller but I think Micky's got em beat. Plus I think it's a buck 69 - can't beat that!

My commute used to include a daily starbucks stop but I find myself more and more going to the McDonalds drive thru for their large coffee. It's 75 cents less than starbucks here in central Indiana and it tastes just as good IMO.

I can't try the Sonic thing because God meant for coffee to be served hot and all the Sonics in this area closed shop so I'll take your word for it.