Filed under: Marketing and advertising, McDonald’s (MCD), Yum Brands (YUM), Wendy’s Intl (WEN), Burger King Hldgs (BKC), Stocks to Buy

McDonald’s (NYSE: MCD) announced its same-store sales results for the month of April Thursday, and the data indicate a healthy fast-food business (”healthy fast food” — isn’t that an oxymoron?).

Global comps as a whole increased 5%. Comps for European locations increased 6.3%, and the Asia/Pacific/Middle East/Africa segment saw a 7.8% rise in same-store sales. McDonald’s restaurants in the Says increased an anemic 2%. The weak domestic sales really need to be addressed so that they can pull more weight and add to the cool story that’s McDonald’s.

The stock has been a pretty decent performer over the last several months, rising over 6% over the three-month timeframe, and over the one-month period, it is up over 7%. And the longer-period returns from the past are even more impressive. Imagine how McDonald’s stock would perform if management figured out how to get people to visit the U.S.’s Golden Arches more often. I suppose April’s performance should be praised since March saw a decline in U.S. comps, as this article makes plain, but that depreciation was the first one in five years, and that states to me that McDonald’s needs to be careful.

It’s all about the marketing, of course. There are a lot of choices out there — Burger King (NYSE: BKC), Wendy’s (NYSE: WEN) and Yum! Brands (NYSE: YUM) — so I think promotion of the brand is key. Some will disagree and state that menus and pricing are the huge drivers — they are important, don’t get me wrong, but perhaps McDonald’s needs to take a cue from Burger King and its campaign with the creepy-king thing — those commercials are clever. Still, if this comps reports says anything, it says that you shouldn’t count the clown out — McDonald’s is a blue-chip stock that’s near a 52-week high, and not only is it a great long-term/core holding, but it’s also quite possibly an interesting shorter-term idea as well.

Disclosure: I don’t own shares in any company mentioned here; positions can change at any time.

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This entry was posted on Saturday, May 10th, 2008 at 2:18 pm and is filed under Marketing and Advertising. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.