Associated Press
NEW YORK — McDonald’s Corp. said today that its first-quarter profit climbed nearly 4 percent as more customers worldwide came to the Golden Arches for a cheap meal.
The company said profit for the quarter ended March 31 rose to $979.5 million, or 87 cents per share, from $946.1 million, or 81 cents per share, last year. That beat estimates from analysts polled by Thomson Reuters, who on average expected a profit of 82 cents per share.
McDonald’s said the stronger dollar hurt results by 8 cents per share and it had a gain of 4 cents per share from the sale of its minority interest in Redbox Automated Retail LLC. The company’s last non-McDonald’s venture, Redbox rents DVDs for $1 a night from vending machines.
The home of the Big Mac has seen sales rise as more consumers shop for a deal. In the first quarter, global same-store sales, or sales at locations open at least a year, rose 4.3 percent. Same-store sales jumped in every area of the world, rising 4.7 percent in the U.S. where the recession has dampened sales growth at most sit-down restaurants.
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Oak Brook, Ill.-based McDonald’s said its U.S. business continues to gain market share, adding that sales of chicken, breakfast and beverages were particularly strong.
New fried chicken menu items and espresso-based drinks have been boosting sales for several quarters. The espresso drinks are being added to the menu at all the company’s U.S. locations — a process that is expected to be completed later this year.
McDonald’s Chief Executive Jim Skinner said in a statement that the company’s strong sales are likely to persist, adding that April same-store sales so far are looking "at least as strong or better than first-quarter sales in every area of the world."
But overall revenue has not been as strong, mainly due to the strong dollar. The nation’s No. 1 hamburger chain warned earlier this year that its sales would be hurt by foreign currency rates. Most U.S. companies that sell goods internationally convert those sales from foreign currencies into dollars when they report their financial results. If the dollar is stronger than those currencies, the translation results in fewer dollars in revenue.
