McDonald’s Corp lured diners with short-term bacon promotion, value meals and redesigned restaurants that helped lift its U.S. same-store sales above Wall Street estimates for the first time in four quarters on Tuesday.
Chief Executive Officer Steve Easterbrook has focused on improving dining experience and delivery services in the past few years by bringing new technologies to the company’s stores, while sprucing up its restaurants by adding wooden tables and faux leather chairs.
The company also launched a new “2 for $5” deal, tweaked its breakfast menu to add donut sticks and offered free bacon with some burgers as part of a limited-period promotion during the first quarter.
Those efforts helped drive a 4.5 per cent growth in same-store sales in the United States, well above analysts’ expectations of a 3.03 per cent rise, according to Refinitiv IBES. Global same-store sales also grew by a better-than-expected 5.4 per cent.
“The trends are definitely improving in the U.S. and that is a big deal,” Edward Jones analyst Brian Yarbrough said.
Shares of the company were up slightly after touching a record high of $198.85 in early morning trading.
The company, however, forecast commodity prices to rise 2 per cent to 3 per cent in 2019, compared with its previous projection of an increase of 1 per cent to 2 per cent.
Overall, it now expects expenses to be higher compared with its previous forecast due to increased investments in technology.
Net income fell to $1.33 billion, or $1.72 per share, in the first quarter ended March 31 from $1.38 billion, or $1.72 per share, a year earlier.
Excluding one-time items, the company earned $1.78 per share. Total revenue fell about 4 per cent to $4.96 billion, due to its move to franchise a majority of its restaurants.
Analysts were expecting a profit of $1.75 per share on revenue of $4.93 billion.