McDonald's profit rises nearly 4%
NEW YORK -- The company said profit for the quarter ended March 31 rose to $979.5 million, or 87 cents a share, from $946.1 million, or 81 cents a share, last year. That beat estimates by analysts polled by Thomson Reuters, who on average expected a profit of 82 cents a share.
McDonald's said the stronger dollar hurt results by 8 cents a share and it had a gain of 4 cents a share from the sale of its minority interest in Redbox Automated Retail. 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 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%. Same-store sales jumped in every area of the world, rising 4.7% in the USA, where the recession has dampened sales at most sit-down restaurants.
McDonald's, based in Oak Brook, Ill., 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 at all U.S. locations — a process expected to be completed later this year. Analysts have said the drinks could make the fast-food chain a big player in the specialty coffee sector once ruled by Starbucks, which has been closing stores and cutting jobs.
McDonald's Chief Executive Jim Skinner said 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 exchange 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.
