McDonald’s hit by currency fluctuations, Australian sales strong

Posted by James Ferre on 10th March 2009

Global sales for the world’s largest burger chain, McDonald’s, declined 4.6% in February, but increased 3.2% in constant currencies, as they continued to show resilience to the global downturn.

Global comparable sales were around 5.4% up on last year after excluding the impact of one extra day’s trading in the leap year of 2008.

“McDonald’s continues to deliver what customers want – everyday affordable prices and quality menu choices,” claimed CEO Jim Skinner. “We serve approximately 58 million customers around the world every day, demonstrating the ongoing appeal of McDonald’s unique combination of convenience, value and variety.”

The fast-food chain advised that operating conditions were likely to deteriorate, putting pressure on their consistent growth rates.

“External factors including unprecedented volatility in foreign currency exchange rates and commodity costs will continue to pressure revenue and margin comparisons in the first quarter,” they noted. “Weaker foreign currencies, including a significant decline in the Eastern European currencies where McDonald’s primarily operates Company-owned restaurants, are expected to negatively impact results.”

February comparable sales in the US increased 6.8% after removing the impact of one extra trading day in February last year due to the strength of the chicken line-up, the core menu led by the Quarter Pounder, as well as beverages and breakfast products, the company advised.

Excluding the calendar shift, comparable sales increased 4.0% in Europe, where growth was driven by unique premium menu offerings and a focus on value.

In Asia/Pacific, Middle East and Africa, February comparable sales increased 0.7%, reflecting a negative calendar shift of approximately 3.4 percentage points due to leap year. Excluding this impact, the segment’s comparable sales were up 4.1% driven by strong results in Australia and Japan, but partly offset by weakness in China. China’s weak February comparable sales were due in part to the celebration of Chinese New Year in January 2009 versus February in 2008, McDonald’s said.

“We remain confident in the fundamental strength of the McDonald’s business. We have the right strategies in place to grow the business for the long-term and we have the operating experience to manage through the current environment,” Mr Skinner concluded.