McDonald's posts higher quarterly profit
New York, April 21, 2012
McDonald's Corporation reported higher quarterly profit yesterday, boosted by better-than-expected sales at established restaurants in the US and its top revenue market of Europe.
McDonald's shares rose as investors breathed a sign of relief over results from Europe, where national debt woes, widespread austerity measures and high unemployment have made demand for American fast-food volatile.
The first-quarter results, boosted by a focus on low-priced food, new menu items, restaurant makeovers and longer operating hours, helped McDonald's continue to outpace rivals like Wendy's and Burger King.
First-quarter net income rose almost five per cent to $1.27 billion, or $1.23 per share, in line with analysts' average forecast, according to Thomson Reuters I/B/E/S.
Sales at restaurants open at least 13 months were up 7.3pc, more than the 6.7pc increase expected by analysts polled by Consensus Metrix.
Same-restaurant sales rose 5 per cent in Europe and 8.9 per cent in the US, where mild weather has helped lift restaurant sales. Revenue jumped 7 per cent to $6.55 billion.
In Asia/Pacific, Middle East and Africa, first-quarter same-restaurant sales were up 5.5 per cent, slightly less than the 5.9 per cent analysts expected, due to lower franchise margins.
'People have been most concerned about Europe and it looks like it's okay,' said Bernstein Research analyst Sara Senatore. Investors had good reason for caution.
McDonald's global same-restaurant sales for February missed Wall Street's target due to a harsh winter and economic upheaval in Europe. Europe's results for March, reported yesterday, topped expectations as McDonald's increased its focus on low-cost food offered via Germany's 'value menu' and the UK's 'saver menu'.
'France is also evaluating options to further strengthen value perceptions at a time when a number of new austerity measures are impacting consumers' confidence and their disposable income,' said chief operating officer Don Thompson, who will succeed retiring chief executive Jim Skinner in July.
McDonald's, the world's biggest burger chain, expects its momentum to continue in April, and forecast a 4pc rise in global same-restaurant sales for the month.-Reuters