McDonald’s said sales were boosted by the launch of all-day breakfasts in October previous year and the introduction of McPick 2, a USA promotion offering customers two items for $5.
Advertisement
Shares of McDonald’s (MCD) rose Friday after the fast-food giant delivered another robust quarter, driven by the continued success of its all-day breakfast menu, as well as positive results from its McPick initiative.
The never ending stream of new products, store designs and promotions at McDonald’s has started to pay off, according to the company’s latest results, which showed higher than expected quarterly sales and profit.
Results in the USA, which typically garners about a third of McDonald’s revenues, were propelled by the launch of the popular all-day breakfast program, which gives customers free rein on when to order pancakes, Egg McMuffins and other popular items that were previously only available in the morning. It phased out its famous dollar menu in favor of what it calls McPick 2, where customers can get two items for $2, and has also been going head-to-head with Taco Bell competing for breakfast customers.
Paul Pomroy, chief executive officer of McDonald’s United Kingdom, said: “I’m pleased with our first quarter performance which has seen us continue to grow like-for-like sales as well as customer visits across the UK”. Its earnings per share, at $1.23, came in 7 cents above analysts’ expectations, and its revenue, at $5.9bn, also exceeded Wall Street projections.
Evidence that a turnaround was gaining traction emerged late last year, when McDonald’s logged its best USA quarterly sales in almost four years.
Although even CEO Steven Easterbrook has said the momentum the restaurant is enjoying can’t be sustained, it’s clear that at least for the time being McDonald’s is riding the wave of enthusiasm for the deal higher. Revenues would have increased 3% in constant currencies.
In the “international lead segment” which includes the UK, Australia, France and Germany, sales rose by 5.2% because of a strong performance in the UK, Australia and Canada. Following the release of the earnings report, the stock was up 2.2% at $128.50 in early trading indications Friday.
McDonald’s just reported first-quarter earnings, and the company absolutely crushed it.
McDonald’s shares have risen about 30 percent since Easterbrook unveiled a turnaround plan in May 2015.
Advertisement
In the “high growth” global segment, quarterly LFL sales increased 3.6%, led by China and positive performance across various other markets, including Russian Federation.
