Who Will Be More Creative McDonald’s Corporation (NYSE:MCD) Or Burger King Worldwide Inc. (NYSE:BKW)?

Posted by Lynn Eisler October 22, 2013 0 Comment 916 views

McDonald’s Corporation (NYSE:MCD) reported at par financial performance amidst weakening same-store sales growth as well as non-stimulating monthly and quarterly sales guidance for October 2013 and 4Q13 respectively. The company reported profit of $1.52 billion ($1.52 per share) during 3Q13 compared to $1.46 billion ($1.43 per share) reported during 3Q12. It marginally beat the street estimates as the analysts were expecting the profit to be reported around $1.51 per share. The revenues grew 2.4% to $7.32 billion against the street expectation of $7.33 billion.

Moreover the global sales also could not meet the street expectations of 1.3% growth as it reported an increase of just about 0.9% for stores that operated for more than a year. McDonald’s reported that is estimates flat global same-store sales for October 2013. While the company reported first monthly same-store sales decline in nine years, it did forecasted that even restaurant margins in the 4Q13 are expected to decline, may be similar to a decline reported during 1Q13 – the quarter which posted largest quarterly decline in margin in almost a decade. The weakened sale declined is attributed to strife competition, touch economic conditions as well as partly to the shifting eating habits.

As McDonald’s plans to regain its sales, it is coming up with a two-pronged approach to boost sales growth in the U.S. that includes revamping its Dollar Menu to ‘Dollar Menu and More’ to lure pocket-friendly customers alongside reflecting better options in its menu especially for consumers pursuing the healthier eating habits. These strategies have forced its competitors including Burger King Worldwide Inc. (NYSE:BKW) to be aggressive in their sales promotions and value deals.

Burger King is taking on to counter sluggish same-store sales performance through its well-defined loyalty program and the well-accepted delivery program – BK Delivers. The rapid expansion of BK Delivers across the U.S. exemplifies its increasing customer acceptance besides enhancing the company’s presence. Following the new openings, the company will be having over 75 delivery units across the nation.

About Lynn Eisler

Lynn Eisler is a national news reporter focusing on economic issues, data analysis and the financial health of state and local governments. Lynn has been honored with the H.L. Mencken Award for Investigative Reporting, the Champion of Justice Award for reporting on the drug war, and the John Hancock Award for business reporting. Lynn was also a Knight Medical School Fellow at the University of Michigan.

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