Mc Donald’s: Winning in the Trenches of Class Warfare
- Posted by blonde
- on December 8th, 2011
Today,McDonald’s Corp. ($MCD), reported impressive November same store sales results: +6.5% YOY in the U.S. I know I have barked for close to a year now on bi-furcation at retail: Joe Six-Pack Misery Index
But now this even spills over to the consumer as a whole; not just consumer soft-lines retail. Like the stellar performance of the Dollar Stores ($DLTR $DG), these recent sales numbers from $MCD further illustrate the consumer is trading down. Add $MCD to the Joe-Six Pack Misery Index. $MCD 1.Consumer Zero.
With 18% of Americans receiving some sort of government transfer payments, its not that hard to do the math. Add to that, sky-rocketing commodity costs for beef, corn, and virtually every other pantry staple, and it’s no wonder consumers are no longer “Eatin’ Good in the Neighborhood” ($DIN) and are breezing through the Golden Arches.
“We’re listening to our customers and delivering what they expect from McDonald’s by optimizing our menu, modernizing the customer experience and broadening accessibility to our Brand,” said McDonald’s Chief Executive Officer Jim Skinner. “McDonald’s steadfast focus on our customers and our operations under the Plan to Win is driving the sustained momentum of our global business.” In the U.S., the continued strength of McDonald’s breakfast daypart, everyday value, the addition of the seasonal Peppermint Mocha to the McCafé line-up, and the Chicken McNuggets promotion drove the 6.5% increase in November comparable sales.”
Hope they bring back those Mc Donald’s Christmas Gift Certificates . . .
Some stats to consider:
$MCD: Performance by segment was as follows:
U.S. up 6.5%
Europe up 6.5%
Asia/Pacific, Middle East and Africa up 8.1%
Conversely, the Luxury goods market is THRIVING, especially jewelry and watches. In November, luxury goods group Richemont posted its results for the six months to September 30, showing sales had increased by 29% to €4.21bn (£3.53bn) and that operating profit had increased to €1.08bn (£934m) compared with the same period the previous year.
The other fine jewelry brands owned by the group reported sales gains of 34% over the six months, with Cartier and Van Cleef & Arpels performing particularly well, while its watchmaking sector had sales growth of 30%. When you consider that Richemont owns brands such as Jaeger-LeCoultre,Vacheron Constantin, it’s obvious that this growth isn’t being driven by volume sales.
Richemont isn’t the only Lux Stock killing it. French conglomerate LVMH, ($MC) which stables brands like Tag Heuer and De Beers, saw its watch and jewelry business increase each quarter sequentially for the first nine months of 2011, showing organic growth of 26%. Burberry ($BRBY) also reported a net profit of £117m for its six months ending September 30, and revenue of £830m. As class warfare comes to the forefront of the 2012 election, the candidate that comes up with solutions to bridge this gap between the haves and the have nots will prevail.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Kristin Bentz is a former Wall Street retail analyst. She served as the product manager for consumer equities at Lehman Brothers. More »
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