The cheap menu paid off for McDonald’s (MCD), which reported a profit in its second quarter, largely based on overseas sales, MarketWatch reported. But they told analysts that rising beef prices in the United States might put the squeeze on the company this year, as they believe prices will rise as much as 9%.
Yum Brands (YUM) also reported stronger sales growth, fueled by overseas sales. Yum doesn’t own any of the casual dining brands that are closing. It operates A&W, KFC, Long John Silver’s, Pizza Hut and Taco Bell.
Yum and McDonald’s make up 5.7% and 5.4% respectively of the PowerShares Dynamic Leisure & Entertainment (PEJ). They’re also holdings in the PowerShares Dynamic Food & Beverage (PBJ) – McDonald’s is 5.2%, and Yum is 5.4%. PEJ is down 18.3% year-to-date, while PBJ is off 7.1% year-to-date.