McDonald’s 1Q earnings strong despite drop in customer visits
Fewer people came to McDonald’s for Egg McMuffins and other breakfast items as competition for morning diners has heated up. But the company still posted strong first-quarter financial results and its stock soared more than 5 percent Monday.
The fast-food chain said the number of customer visits fell in the U.S., partly because of increasing breakfast competition. McDonald’s didn’t name its competitors, but Burger King, Dunkin’ Donuts and others have updated or expanded their breakfast menus recently.
McDonald’s said sales rose 2.9 percent at established U.S. restaurants, but mainly due to higher prices on its menu. Worldwide, that figure rose 5.5 percent, which is a lot stronger than the 3.6 percent increase that industry analysts had forecast, according to FactSet.
The company has worked to expand its U.S. business – its largest market – with new initiatives, such as fresh-beef patties in its Quarter Pounder and a new value menu. It’s also redesigning its U.S. restaurants, adding touch-screen kiosks for customers’ orders, and expanding delivery nationwide.
The Oak Brook, Illinois-based company earned $1.38 billion, or $1.72 per share, for the period ended March 31. A year earlier, it earned $1.21 billion, or $1.47 per share. Adjusted earnings came to $1.79 per share, beating Wall Street expectations by 12 cents, according to Zacks Investment Research.
Total revenue declined 9 percent to $5.14 billion, but still beat expectations. McDonald’s said the revenue drop was due to its ongoing move to convert more company-owned restaurants into franchised ones.
Shares of McDonald’s Corp. rose $8.33 to $166.63 in trading Monday.
Portions of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on MCD at https://www.zacks.com/ap/MCD