Investopedia: McDonalds Continues To Reinvent

McDonald's (NYSE:MCD) is a curious story. It runs only one concept worldwide, but it runs it extremely well. What's more, though it has a fairly limited menu and a relentless focus on driving out costs, it is seeing growth and operating leverage by expanding that menu and finding even more ways to become even more efficient. It is also an interesting contrast to Yum! Brands (NYSE:YUM) as the companies seem to be following very different playbooks at this point in their corporate lives. 

Great Second Quarter Performance 

If McDonald's is the place where people go to eat when they cannot afford better options, that may explain why results were so strong in the second quarter. Unlike Yum! Brands, McDonald's actually saw good same-store sales growth in both the U.S. (up 4.5%) and Europe (up 5.9%), while Asia-Pacific and emerging markets were more modest (up 5.2%) relative to the much higher economic growth in those areas. 

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McDonald's Continues To Reinvent (MCD, YUM, RT, RRGB, WEN)

Investopedia: Chipotle Still Smokin'

Like the smoked jalapeno it's named after, Chipotle Mexican Grill (NYSE:CMG) offers more than just heat. Chipotle continues to post eye-popping traffic growth and strong margins, and there still looks to be plenty of expansion potential. It is also worth noting, though, that Chipotle sports a valuation that may be too spicy for even the boldest growth investors.


Another Great Quarter
Chipotle once again delivered impressive growth, exceeding the high end of the analyst range with 24% overall growth and nearly $510 million in revenue. While new store openings continue to be an important part of the story, the existing outlets are doing exceptionally well too - same-store sales growth was 12.4% for the first quarter, with higher pricing chipping in less than 1%. (For more, see Should Investors Ignore Monthly Sales?)

Profitability was a little more mixed, but still good news for the most part. Store-level margins contracted almost a full point, but still stand at an impressive 25.2%. Similarly, operating margin contracted a bit (from 15% to 14.7%), but operating income growth was still 22%. Growth was restrained a bit by promotional expenses tied to a buy-one-get-one-free offer, as well as higher food costs. 



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