McDonald's (NYSE: MCD) has always been known for its famous French fries. Interestingly enough, though, it seems to me that the fast-food chain is becoming known these days for its coffee. I never thought McDonald's would invest as much as it has in coffee, but it looks like it's doing the right thing. According to this Bizjournals piece, McDonald's is putting its weight behind a coffee-bar initiative called McCafe. The program is being tested in various locations now and will be available nationally sometime next year.

I love the timing on this. After all, Starbucks (NASDAQ: SBUX) isn't doing so well. Not only is its stock hovering around 52-week-low territory, but the java king recently announced some store closings. That's almost unimaginable. Remember the days when every street corner needed a Starbucks? Yeah, those days are long gone. And I think McDonald's is smart in attempting to expand the brand equity of its coffee-brand portfolio. People need more of a reason to go to the palace of the hamburger-serving clown than just Big Macs these days, since the Big Mac and its various fat-saturated colleagues aren't as popular in these health-conscious times. I'm not saying drinking coffee is an exercise in life preservation, I'm just saying that it's good for McDonald's to focus on less controversial fare.

This significant foray into coffee is arguably a key reason for the company's stellar stock performance over the last few years and its competitive edge against rivals Burger King (NYSE: BKC) and Wendy's (NYSE: WEN). According to the AOL Finance snapshot, McDonald's is very much in the green for every timeframe save for year-to-date, which sees the stock down less than 1%. That's strength. McDonald's is a little below its 52-week high, and it might make for an interesting investment idea. At the very least, you can look forward to its McCafe program.

Disclosure: I don't own any company mentioned; positions can change at any time.

McDonald's continues its coffee crusade originally appeared on BloggingStocks on Wed, 09 Jul 2008 09:56:00 EST. Please see our terms for use of feeds.

McDonald's (NYSE: MCD) may be the big brand name in the fast-food industry, but don't discount Burger King (NYSE: BKC). The King reported its fiscal Q3 numbers on Thursday, and they were pretty regal indeed.

Revenues increased 10%, and earnings per share did even better, rising 20% to 30 cents (that beat earnings by three pennies, says Briefing.com). Now, when talking about retail stores and fast-food joints, the issue of same-store sales always comes up, since it's such an important element to consider (be sure to keep in mind that comps must always be put in an overall context, especially if you are only measuring a one-month timeframe). Global comps increased 5.8% for the quarter, a good showing for Burger King which wants to become a force to be reckoned with around the world. The domestic side of things isn't doing too badly either as comps in the United States and Canada moved up 5.4%. Restaurant margins, however, decreased due to the challenging commodity-cost environment we all live in nowadays. Otherwise, I see these earnings as very positive for Burger King, and I am bullish on the stock.

Continue reading Burger King's earnings up thanks to that creepy mascot?

Burger King's earnings up thanks to that creepy mascot? originally appeared on BloggingStocks on Fri, 02 May 2008 08:45:00 EST. Please see our terms for use of feeds.

McDonald's sales spike 6.9% in October originally appeared on BloggingStocks on Thu, 08 Nov 2007 09:35:00 EST. Please see our terms for use of feeds.

I went to Arby's for lunch today to pick my "5 for 5.95" and I must say it's overwhelming.

Continue reading Arby's takes "super-size" to the next level

Arby's takes "super-size" to the next level originally appeared on BloggingStocks on Sun, 20 May 2007 00:26:00 EST. Please see our terms for use of feeds.

Strong McSales originally appeared on BloggingStocks on Tue, 08 May 2007 13:15:00 EST. Please see our terms for use of feeds.

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and watch out for more Battle of the Brands posts.

The Hamburglar vs. The Creepy King

Looking at the financial data for McDonald's Corporation (NYSE: MCD) and Burger King Holdings Inc (NYSE: BKC) tells us that McD's cooks BK on market cap ($53.7B to $2.9B), and that both stocks are up big since BK started trading last May (McD's is up 29%, BK is up 24%). But these brands aren't really found in the numbers. Let's look at the factors that make these fast-food giants the top two burger chains in the land.

The Menu

What's the first thing you think of when someone says McDonald's or Burger King? Probably their signature sandwiches -- the Big Mac and the Whopper -- because they are what make the brands. There are two factors to look at here -- taste and health.

As far as taste goes, my nonscientific survey says that both sandwiches are flawed (yes, I used writing this blog as an excuse to eat fast food twice in the same week). With the Big Mac, most of my problem was finding the two all-beef patties in a sea of buns and lettuce it was surrounded by. With the Whopper, my criticism is that the burger should come with cheese on it without you having to ask (or pay extra). The burger is supposed to be their top-of-the-line; they could at least throw a slice of cheese on it for you, without you having to make it "your way."

Continue reading McDonald's vs. Burger King: Battle of the Brands

McDonald's vs. Burger King: Battle of the Brands originally appeared on BloggingStocks on Mon, 09 Apr 2007 11:14:00 EST. Please see our terms for use of feeds.

Continue reading From concept to (big) mouthful: how McDonald's third-pounder came to being

From concept to (big) mouthful: how McDonald's third-pounder came to being originally appeared on BloggingStocks on Thu, 08 Mar 2007 22:40:00 EST. Please see our terms for use of feeds.

As expected, McDonald's Corp. (NYSE:MCD) posted strong fourth quarter results. The market, however, seemd to react to the company's annoucement that it plans to invest $1.9 billion this year on opening new stores and revamping existing ones. Investors always react negatively when a company says it plans to put money back into the business.

9:30 a.m. -- I log onto the site for the call which features a picture of a salad. I know they are big sellers but has anyone actually seen anyone at McDonald's order a salad. Maybe I go there at the wrong times. Then I quickly realize that I am there one hour too early. I immediately secure a cafeinated beverage to wake up.

11:30 a.m. -- The call actually is starting. It's a pity since I am digging the bouncy, upbeat jingles. Finally, a company knows how to program hold music. There are pop, hip-hop and Spanish language versions of the jingle. Darn, it's over

11:31 a.m. -- Usual disclosures.

11:35 a.m.-- CEO Jim Skiner. I am pleased to report that 2006 was an outstanding year for McDonald's., Our revenues reached record high. We returned 5 billion to shareholders. Total shareoholder return was 35 percent. "As I said, an outstanding year."

Plan includes financial discipline. Strategy is growing by not just getting bigger. This year, we plan to open 800 new restaurants. 200 US., 150 Europe, 375 Asia. Invest $1 billion in existing restaurants. Our committment is to return at least $10 billion to shareholders. Our plan to win will continue to be operational roadmap.

Continue to add new menu items at breakfast and in chicken sandwiches in US.

1137; IN china. our key growth market. We have the most menu choices amongst our menu set. The drive through is abssolutely critcal to our long-term development. We'll also market breakfast nationally.

.. Our system has never been more alligned. McDonald's is a system that succeeds because we are a franchising org., We are committed to right balance of franchises versus owners.

Matthew Paull, CFO

Clearly we've reached a point where customers and investors agree that McDonalds is better. HIghest operating margins since 2000. US margins were up 30 basis points. The US fourth quarter margin increasis is especially meangingful because there was profit sharing in the year earlier period.

11:41. I can assure you that G&A control is a high priority for the management team. Total shars acquired in 06 were 98 million.

Lookin. The headwinds created by our old compensatipn programs (options) aren't nearly as strong. The company is granting fewer options.

We expect future buybacks to yeiled a meaningful decline in share count because of fewer options.

IN each of our major market in which the legal market is conducive to ranchises., They want less than 30 percent tob ecompany owned. More franchises in U.K. and Canada.

Licensing,

Given our menu . Beef and Chicken are clearly the primarily drivers. The company sees beef down, Chicken up in US, both up in Europe.

"WE are determined to get better at being better at everything we do." Gosh that's vague.

11:47. UBS Congrats. Why do analysts do that? It's annoying. Asks questions about UK market.

Paull: We do see positive signs In Europe.

Goldman: Development license agreements. Timing of agreements? IS the proceeds included in the $5 bln returned to shareohlders

Paull: Have'n't figured out what to do with the proceeds. WE are very, very confident that we will get this done.

"We''re not going to get into specifrics"

Citi: Latin America., company units. Why more company stores in Latin America?

MCD: We had some litigation with our franchiesses .We are through all of that now. We are doing a lot better in Latin America. Our margins improved dramticaly down there.

BofA: Menu price increase going into 07? Competition for breakfast?

Skinner: Breakfast. We're the clear leader. WE are very very proud of our breakfast items. Our delivery at breakfast will continue to improve. WE are focussed on it.

CFO: We've tried to raise prices at slightly below food away from home . If you look at 07, food away from home index, 3.6, slightly ahead from 2006. Certain restaurant companies want to get ahead of minimum wage pressure

For the last four years, when we raised prices to recover prices. saw guest count rise, "speaks to power of brand."

Bear: Plans for Coffee in 2007? US Minimum wage increase, any cost pressure?

Skinner: We have a number of thing in test that include speciality coffees, premium burgers. Breakfast burritos. The coffee has done very, very well for us.We are looking at the potential for speciality coffee in 07, Obviously, we will continue to. There is always going to be some pressure when the minum wage increases., We are paying above the minimum wage now. We don't expect to have a huge pressure with this. MCD pays above minimum wage

Lehman: Debt level?

CFO: WE are about 8.5 bln at the year end. expect to stay there. the average cash balance in 096,

Wachovia: POS system. Improvements?

Skinner: Yes there have been improvements . We still have huge upside potential. We've improved on the accuracy and yet we are not there. WE won't be satisfied. We've made progress but we continue work hard on this. It's a journey not a destination.

CFO: AT the end of 06. POS was in 7,000 in US. Most weren't in US.

Oyster Capital: Extended hours?

CFO: We're very happy with extended hos in the US, Now its expanding to other geographies. We're very satisfied with the margins that we get. The strategy is starting to spread to Asia.

CIBC: How many countries have above 30 percent corporate program?

CFO: Not many are like UK and Canda. Franchising laws and China and Russia aren't there

DB: traffic pickup because of ecoli scare

CFO: Mcdonald's looked into this and found no effect.,

MS: Gift card activations?

Skinner: Had an uptick. Had more sales of giftcards this year. Don't record them until they are spent. We expect them to be better.

Paull: WE adopted this better not just bigger. Internally, we had doubts ourself. WE ar efairly convinced that it is right for us. The specifics. WE are basically goign to be putting our money where are mouth is.

Skinner: Right peoiple are in the right place.,

Liveblogging McDonald's originally appeared on BloggingStocks on Wed, 24 Jan 2007 11:57:00 EST. Please see our terms for use of feeds.