McDonald’s Earnings Call Nuggets: Value Strategy, Negative Comps
Michael Kelter – Goldman Sachs: You guys talked a lot about the reason for the same-store sales deceleration being primarily macro driven, soft industry sales and economic slowdowns, and lower consumer confidence, but this quarter, your global same-store sales were lower than in any quarter even during the peak of the financial crisis, at time when the macro indicators like consumer confidence were much worse. Why do you think that is? Why is McDonald not weathering the macro turbulence as well as before? Then on a related note, how can you be certain that emphasizing value is the right strategic response and just compound the challenges you’re faced by eroding margins too?
Catalysts are critical to discovering winning stocks. Check out our newest CHEAT SHEET stock picks now.
Don Thompson – President and CEO: A couple of things on your comments. One, relative to how we fed in the past actually the strategies and some of the results we’re seeing are similar I will tell you one of the differences is it’s been very red we’ve ever seen all of our major markets experiencing the impact of these kind of global economies at the same time. So, that is one of the things that we’re seeing right now and therefore we are as we have been investing to ensure that we continue to drive traffic and market share because we know that correlates to our longer term growth. Relative to whether or not we know that these are the right strategies. I mentioned earlier on the call our market share is flat or up in all of our major markets, that is a definite sign of strength and we are gaining market share in several of our markets where we’ve really placed some of these additional efforts. So, we feel really good about that. clearly, we’d love to be able to see more sales and that will come in time, but right now it’s about having more traffic and appealing to more customers.
Mitchell Speiser – Buckingham Research: Thanks for sharing the trend in October. I was just wondering I know you usually don’t do this, but you did say negative you haven’t said that in a current quarter as far as I could tell, can you may be just give us a sense of the magnitude of the negative comps that are running in October and does that big trading shift play into that negative at this point during the month or more at the end of the month?
Don Thompson – President and CEO: A couple of things. One is, as you know, we have been transparent and continue to want to be. So, we wanted to give you guys some insight into where we saw October trending and that’s only what that is. That’s about October and the trend we see in October. We won’t give additional information about the quarter. I will tell you that the trading day does factor into that negative trend.
A Closer Look: McDonald’s Earnings Cheat Sheet>>