McDonald’s Q1 Earnings Meet Expectations

by Angela Nazworth | April 20, 2012 11:52 am

Cutting “pink slime” from its menu[1] apparently hasn’t hurt McDonald’s (NYSE:MCD[2]) wallet.

The company on Friday announced a 7% increase in net income for the first quarter of 2012. Profits of $1.27 billion ($1.23 per share) topped last year’s $1.21 billion ($1.15 per share) and matched Wall Street expectations. Revenues of $6.55 billion also were up from the year-ago period and narrowly beat estimates for $6.54 billion. MCD shares were up about 2% in midday trading Friday.

The world’s dominant fast-food joint credits some of its recent success to its “evolving” menu that includes coffee drinks, fruit smoothies and the popular Chicken McBites. The new items may have enticed customers to stop in or drive thru whenever they’re in the mood for a snack, instead of limiting their McD’s fix to breakfast, lunch or dinner.

The “stop-in-for-a-treat” trend is most prevalent in the U.S., where the burger giant saw an 8.9% increase in sales at restaurants that were open for at least 13 months. Data from newly opened restaurants was not included in the report.

“The ongoing strength of McDonald’s results, amidst persistent economic headwinds, is a testament to our customer-focused plans and our proven business model,” McDonald’s CEO Jim Skinner said in a press release.

Global sales were up as well. McDonald’s reports a 7.3% global sales growth at stores open for at least 13 months.

The company’s European market delivered solid results: Comparable sales growth was at 5% and operating income growth reached 4%. Led by strong performances by its stores in China, Australia and Japan, McDonald’s sales in Asia Pacific, Middle East and Africa increased 5.5%.

Source URL: https://investorplace.com/2012/04/mcdonalds-q1-earnings-meet-expectations/

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