* Strong year-ago results, weak global economies a challenge
* Fourth-quarter results top expectations, U.S. helps
* Shares up 60 cents
By Lisa Baertlein
Jan 23 McDonald's Corp on Wednesday
forecast a decline in global restaurant sales for January, as it
and other fast-food chains fight for customers who are spending
cautiously during continued economic uncertainty.
The world's biggest restaurant company by revenue also
reported an unexpected rise in December sales at established
U.S. outlets, which helped lift its fourth-quarter profit above
Wall Street expected the early part of 2013 to be tough for
McDonald's as it runs short of quick fixes for its business in
the United States, and bumps up against strong year-earlier
results that were bolstered by unseasonably warm weather.
McDonald's forecast for a decline in this month's global
same-restaurant sales suggests a "pretty clear drop off between
December (2012) and January (2013)," Morningstar analyst R.J.
Global same-restaurant sales were flat in December, aided by
an unexpected 0.9 percent rise in the United States - its
second-largest market for revenue behind Europe.
The company's push to keep more restaurants open on
Christmas Day and its shift of the limited-time offering of the
popular McRib sandwich to December from October bolstered the
December U.S. results. Analysts polled by Consensus Metrix had
expected those sales to drop 1.78 percent.
McDonald's expects near-term top and bottom-line growth to
remain pressured in part because the company must top strong
results from a year ago, Chief Executive Don Thompson said on a
conference call with analysts.
Last year's global sales at McDonald's restaurants open at
least 13 months increased 6.7 percent for January and 7.3
percent for the first quarter.
Fast-food chains like Burger King Worldwide Inc and
Yum Brands Inc's Taco Bell have introduced new U.S.
menus and are doing a better job of competing with McDonald's.
At the same time, U.S. consumers have less money in their
pockets since the end of the payroll tax cut.
"We suspect choppy demand trends and the impact of the loss
of the payroll tax deduction (in the United States) are in part
to blame" for the company's downbeat guidance, Lazard Capital
Markets analyst Matthew DiFrisco said in a client note.
And, in what could signal a troubling "trade-out" trend for
restaurants in 2013, U.S. consumers last month made their
biggest spending shift from restaurants to grocery stores since
August 2011, ITG Investment Research analyst Steve West said.
Fourth-quarter net income at the world's biggest restaurant
chain rose 1.4 percent to $1.40 billion, or $1.38 per share.
That topped analysts' average forecast of $1.33 a share,
according to Thomson Reuters I/B/E/S.
Total sales rose 1.9 percent to $6.95 billion.
To continue to remain competitive, McDonald's doubled down
on promoting its value menus - such as the U.S. Dollar Menu.
That effort has pressured profitability, raising concern among
The company's shares gained 60 cents, or 0.62 percent, to
$93.54 in afternoon trading on the New York Stock Exchange.