Investir — fierce competition in the United States

McDonald's Investir 4 to 10 November 1995 McDONALD'S Tough competition in the United States With a gain of 28% since the start of the year, McDonald's is among the leading stock market performers among the foreign stocks listed in Paris. After being shunned by Wall Street in 1994 (Investir had taken advantage of this to recommend the share last November at 144 F), the stock is again riding high. Analysts have again raised their estimates of results for 1996. Thus, in the third quarter, the world's leading fast-food group pleasantly surprised the experts, by announcing a 14% increase in its net profit, to 400 mil- lion dollars, for systemwide sales up 13%, to 7.8 billion dollars. In nine months, the "fast food" king has therefore earned a little over 1 billion dollars (1.46 dollars per share) and has opened 1,453 new restaurants, bringing their total number to 17,403, at 30 September. However, while the group continues to record impressive growth in its profits internationally (operating profit grew by 34% over the nine months), an activity that now accounts for more than half of its earnings, business in the United States is running at a slow pace. Operating profit rose by only 2%, because the firm is subject to tough competition and prefers to trim its margins in the short term, in order to regain market share. Furthermore, McDonald's, which had launched "satellite" restaurants (of smaller surface area), has decided to reduce the annual number of openings from 1,000 to 700. → The share may still merit attention. ALT. In Paris: 202 F (206.5-150.5); in New York: 41.15 (42-27.75); ratios (1.97 dollars estimated in 1995 and 2.2 dollars in 1996): 20.8 and 18.6; yield (0.27): 0.6%; market cap: 28.75 billion dollars; code: 12948; (RM).