McDonald's Corp. CEO Jim Skinner took great care during an earnings call today to paint his company as recession-resistant and tout its franchisees' access to credit.
"There's no denying that these are interesting times to be doing business," Mr. Skinner said, adding that McDonald's business is still growing and "we continue to be recession-resistant." The company reported third-quarter earnings of $1.2 billion, up from $1.1 billion a year ago. Same-store sales in the U.S. were up 4.7% with chicken, breakfast and beverages the key sales drivers.
Even so, the company is not immune to inflation and rising commodity costs, which have made its value-menu platform and its top-selling double cheeseburger a difficult business proposition for some franchisees. Mr. Skinner said that in the U.S., McDonald's is working with franchisees to solve profitability issues with the double cheeseburger, which has been selling for a dollar in most markets since 2002. The chain has been testing the double cheeseburger at higher prices and with one piece of cheese, instead of the usual two. "We expect to have a decision soon," he said. Ad Age (10/22/08)