This Article is From Apr 22, 2016

All-day Breakfast, Promotions Drive McDonald's Profit Jump

All-day Breakfast, Promotions Drive McDonald's Profit Jump
McDonald's Corp's quarterly profit jumped 35 percent in the latest quarter, as all-day breakfast and new meal deals lured more diners to its U.S. restaurants.

Shares in the world's fast-food chain are up nearly 28 percent from a year ago, when then-new Chief Executive Steve Easterbrook launched a turnaround strategy that has included simplifying sprawling menus and improving speed and service to counter intense competition from the likes of Burger King, Dunkin' Donuts and Shake Shack Inc.

Sales at McDonald's U.S. restaurants open at least 13 months grew 5.4 percent in the first quarter, outpacing the 4.6 percent gain expected by analysts, according to research firm Consensus Metrix.

All-day breakfast, launched in October, has been a hit with U.S. customers looking for thrifty options.

The company also got a lift from a $5 McPick 2 promotional offer, which allowed diners to choose two items from a menu that included the Big Mac and Quarter Pounder with Cheese.

McDonald's global sales at established restaurants rose 6.2 percent, the biggest leap in three quarters. That was due, in part, to strength in "high growth markets" such as China and Russia.

The net income attributable to McDonald's rose to $1.1 billion, or $1.23 per share, beating the average analyst estimate of $1.16 per share, according to Thomson Reuters I/B/E/S.

Net revenue fell 1 percent to $5.90 billion, but topped the average estimate of $5.82 billion. The revenue decline was the smallest in seven quarters.

Excluding the impact of a strong dollar, revenue rose 3 percent.

McDonald's, which has been selling company-run restaurants to independent operators to cut overhead, said total operating costs fell nearly 10 percent.

Shares in McDonald's which are trading near all-time highs, were unchanged at $125.77 in midday trading on the New York Stock Exchange.
© Thomson Reuters 2016

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