Although McDonald's (MCD) posted weak global sales again in January, the latest monthly report from the restaurant owner provided at least some reason to be hopeful about 2015. It might only be a glimmer, but it's good news for the new CEO.
Overall, comparable sales fell 1.8% in January, with the Asia-Pacific, Middle East and Africa region primarily responsible. There, sales were down 12.6%. In U.S. stores, same-store sales rose 0.4%, and in Europe, comparable sales were up 0.5%.
According to Consensus Metrix, analysts were anticipating a 1.2% decline in total same-store sales. Sales in the U.S., with more than 14,000 of McDonald's 36,000 locations, were estimated to be the strongest last month, up 0.3%. In Europe, a 0.5% decrease was projected, so the company surpassed both of those. In APMEA, a drop of 8.4% had been forecast, though the actual number clearly was even worse.
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The news from McDonald's was the last monthly sales report with Don Thompson as CEO. Thompson, who is being replaced March 1 by Steve Easterbrook, decided in late January to retire after a difficult two-and-a-half years running the world's largest restaurant operator, measured by system sales. Because of McDonald's revenue stagnation and a flat stock price during his time as CEO, it's been speculated that Thompson was under pressure to step away from the company. He made his announcement days after McDonald's reported its 2014 results, detailing one of its worst years in two decades.
Without question, there are ample worries about the company's ability to retain customers, and bring in new ones, amid incredible competition and ongoing negative headlines at home and overseas. There's also an argument for optimism. That's because in the U.S., it was the second monthly increase in a row. That's a notable development, even though both January and December were going against weak comparisons from the previous year. In December, monthly comps were positive for the first time in more than a year.
This is a small step forward, not a reversal of a trend that's been going against the company. Still, for the new CEO, sales of the recent past have been so unimpressive that it has the potential to make his first few months slightly brighter. When any month or quarter is compared against a poor showing from the prior year in retail, improvements are more likely. That doesn't last forever, but it may provide Easterbrook with the opportunity to begin his turnaround ideas amid calmer times. Of course, if weakness remains, it's another story, since investors want to see revenue growth resume earlier rather than later. What McDonald's needs is positive momentum. It's had none at all. The U.S. results could change that.