What ate into McDonald's sales?

Like many companies this winter, the fast-food giant blamed a drop in same-store sales on the weather. But could its problems be bigger than a snowbank?

By Motley Fool Investor Beat Mar 10, 2014 2:24PM
McDonald's (MCD) reported a same-store sales drop for the month of February, which has caused concern among investors. The company cited both competition and the harsh winter weather this year as reasons for the decline, particularly in the North American market.

However, in this video, Motley Fool analyst Taylor Muckerman expresses his doubts that the weather can really be blamed here; he sees competition as a much more damaging factor.

While McDonald's thrived during tighter financial times just after the recession, Taylor notes that the fast casual dining space now has a multitude of options that are just as fast as McDonald's -- but healthier, tastier and not much more expensive.
One of the bigger questions may be: Where is McDonald's going to find growth from here? While the company is still doing well in Europe, that was the only major geographical region where the company saw growth. The U.S. was once the bread and butter of the company and is now showing a continuing trend of decline.
While Taylor notes that continued growth in Europe could be a driver for the company going forward, the slowing performance in the world's other markets is definitely a concern. While the stock is stable and pays a nice dividend, it has lagged the S&P significantly over the last year, and Taylor isn't a buyer of McDonald's today.

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7Comments
Mar 10, 2014 7:13PM
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My local wanted $4.65 for a Big Mac. Are they out of their mind? It's a Big Mac. Plus you have to stand in line for ages while wishing you knew Spanish so you could give your order to the kid behind the cash register who doesn't habla English, and you KNOW is going to get it wrong.

They have a 2fer $5 happening now, but I am just out of the habit of going there.
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Maybe evidence of their use of pink slime, supporting inhumane farming practices, low pay wages & their general unhealthy toxic food menu had something to do with consumers going elsewhere...just a hunch.
Mar 11, 2014 11:37AM
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I'll bet Silky Girl is a lot of fun at parties......Arf, arf, arf,..
Mar 11, 2014 4:10AM
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Mar 11, 2014 12:57AM
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Food's overpriced and tastes like crap!
Mar 10, 2014 11:01PM
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I've never been to a MacDonalds-I don't eat food "cooked" by someone other than myself. I smell it if someone brings a bag of it on the bus-it actually makes me gag. I usually get off the bus-its absolutely revolting.
Mar 10, 2014 8:16PM
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To only answer the "headline question"...It may have been the cockroaches in the back room.
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