McDonald's Competitor, Jack in the Box, Closing 40 stores

While McDonald's appears to be thriving in the downturned economy, it appears to have had an adverse affect on the McDonald's competitor, Jack in the Box.  Jack in the Box is reported to be closing 40 of its' stores by October 3rd.  These closures are reportedly due to poor Return on Investments.  See full article below:

http://www.forbes.com/2010/09/29/jack-in-the-box-to-close-40-restaurants-marketnewsvideo.html

Meanwhile, MCD's stock price went up slightly today and closed at $74.51 up $0.06 or (0.08%).

http://www.google.com/finance?q=mcd

Some Strengths and Weaknesses

Based on my research throughout this blog process I have identified a few strengths and weaknesses at ole McDonald's.

Strengths
Brand Recognition
Reasonable Prices
New Product Innovations
Global Market Share
Charitable Program
Good Advertising

Weaknesses
Unhealthy Menu Items
High Employee Turnover

In my quick assessment, the strengths outweigh the weaknesses which probably helps explain part of the reason the stock price is continuing to perform so well.  Today MCD closed at $74.63 down -$0.13 (or -0.17%).

http://www.google.com/finance?q=mcd

Did you know McDonald's has an Executive Chef???

I never knew until I started doing this blog that McDonald's has an Executive Chef.  That's right, an Executive Chef trained in the culinary arts!!!  He is Chef Dan Coudreaut and he was schooled at the Culinary Institute of America and was once a chef at the Four Seasons.  He is now the Executive Chef and Director of Culinary Innovation at McDonald's.  He has been with Mickey D's since 2004.  Attached is a link with some question and answers from Chef Dan.

http://www.mcdonalds.com/us/en/food/food_quality/trends_innovation/chef_dan_coudreaut.html

His tasty innovations at reasonable prices is part of the reason the stock price has been doing so well of late.  MCD closed today at $74.64 down from yesterday -$0.49 (or -0.65%).  However, Chef Dan may need to come up with a new recipe if this negative trend continues for the long-term.

What's working at McDonald's???

Found the article below on foxnews and thought it was a fairly good synopsis of the things McDonald's has recently implemented to not only improve profits but its' image as well.

http://liveshots.blogs.foxnews.com/2010/09/22/road-to-recovery-whats-working-mcdonalds/

The stock is continuing to hover around the same price.  It closed today at $75.13 down -$0.38 (or -0.50%).

New product - Angus Snack Wraps

McDonald's has a promtion going for the New Angus Snack Wrap.  It comes in three varieties:  Mushroom & Swiss (430 calories), Deluxe (410 calories), or Bacon & Cheese (390 calories).  It is only being offered at participating stores.  They are promoting it as a snack, but that is a pretty high calorie count for a snack (at least in my opinion). 

http://www.mcdonalds.com/us/en/promotions.html

I personally have not tried the wrap, but it looks somewhat appealing on the website.  If anyone out there has tried it, please weigh in and post a comment.  We will have to see if these remain on the menu as not all promotions make it long-term.  Of course sales will play a large part in that decision.

The MCD stock price made improvements since Friday and closed today at $75.11 up +0.79 cents (or +1.06%).

http://www.google.com/finance?q=mcd

 

Mission Statement

The following is the answer McDonald's gives when asked by student researchers what its' mission statement is:

"McDonald's brand mission is to "be our customers' favorite place and way to eat." Our worldwide operations have been aligned around a global strategy called the Plan to Win centering on the five basics of an exceptional customer experience – People, Products, Place, Price and Promotion. We are committed to improving our operations and enhancing our customers' experience."

http://www.aboutmcdonalds.com/mcd/our_company/mcd_faq/student_research.html?DCSext.destination=http://www.aboutmcdonalds.com/mcd/our_company/mcd_faq/student_research.html#1

Not sure if the authors of our text would love it, but McDonald's must be doing something right as they have been performing quite successfully for many years.  Which brings me to the current stock price.  MCD closed today at $74.32, down -0.48 from yesterday.

http://www.google.com/finance?q=mcd

Until next time...

Did the stock rebound???

MCD's stock price opened today at $75.25 appearing to rebound from the loss it took after announcing its' August sales figures last Thursday.

http://www.tradershuddle.com/2010091381511/Stocks/pre-market-update-gapping-stocks-c-bac-aa-ebay-mcd.html

However, it did not sustain the opening price and ended up closing at $74.57 which is down -$0.44 (or -.59%).

http://www.google.com/finance?q=mcd

Guess the rebound did not happen after all... at least not yet, but I suspect it will.  We will have to stay tuned to find out.

JUST FOR FUN:

Well, Mr. Hamburger University Gradute, Lucian, answered the trivia question correctly.  The first McDonald's to host indoor seating was in Denver, Colorado.  Way to go, Lucian!!!

August Sales Figures Are In

McDonald's reported a global comparable sales growth of 4.9% for the month of August.  All segments reported an increase, but the Asian/Middle East/Africa segment definitely led the way:

U.S. up 4.6%

Europe up 2.2%

Asia/Pacific, Middle East and Africa up 7.8%
 
http://phoenix.corporate-ir.net/phoenix.zhtml?c=97876&p=irol-newsarticle&ID=1468973
 
While Mickey D's is putting a positive spin on these numbers, and they do look good on the surface, those playing the market obviously do not agree as the stock price took a big hit closing at $74.37 which is down 
-$1.71 (or -2.25%). 
 
http://www.google.com/finance?q=mcd
 
We'll get a better picture of the company when they post their 3rd quarter earnings which are expected to be released October 21st.  Until then...
 
JUST FOR FUN:
 
Here's a TRIVIA QUESTION for you (correct answer will be given on my next post):
 
The original McDonald's opened in 1940 as a Drive-In.  The first McDonald's to actually have indoor seating opened in 1962 in what U.S. city???

External Factors - Bad Economy & Product Differentiation Boosts McDonald's

The biggest external factor affecting McDonald's is the weak econonmy.  As consumers plan to spend less money, they look for lower cost dining options which results in good news for McDonald's investors as the sales continue to increase.  Additionally, McDonald's is attempting to differentiate some of its product offerings from the other fast food chains, and thus rolled out the McCafe real fruit smoothies and frappes on July 13th.  These new product offerings appeared to contribute to the 5.7% sales increase McDonald's posted in July.  The August sales figures are tentatively planned to be released on September 9th and we will have to wait and see the results, but the expectation is another GREAT month.

http://articles.moneycentral.msn.com/news/article.aspx?feed=AP&date=20100907&id=12009837
http://www.aboutmcdonalds.com/mcd/our_company/mcd_history.html

MCD stock closed today at $75.80 which is up $0.71 (or 0.95%).

http://www.google.com/finance?q=mcd

Mickey D's #1 in Price Momemtum

MCD has the highest price momentum in its segment of the market by trading at 99.99% of 52-week high and posting a 5.5% price change over the last 4 weeks... WOW that is HUGE!!!

http://www.cnanalyst.com/2010/09/top-10-dow-30-stocks-with-highest-momentum-mcd-dd-kft-ko-t-vz-ibm-cat-pg-cvx-sep-02-2010.html

If only we had been clairvoyant and loaded up when the stock was at the 52-week low of $53.88 (of course we would have needed thousands in cash just lying around in order to purchase a large amount of shares), then today we would have cashed out for over a $20 increase per share as MCD closed at $75.02 today on the NYSE.

http://phx.corporate-ir.net/phoenix.zhtml?c=97876&p=irol-stockquote