MCD McDonalds Corp

By Cara Lombardo 

McDonald's Corp.'s McPick 2 meal deal and new Buttermilk Crispy Tenders boosted the fast-food chain's sales in its latest quarter.

Fourth-quarter same-store sales rose 5.5% globally and 4.5% in the U.S., the company's largest market. Both figures beat analysts' estimates.

While the burger giant's earnings also rose, revenue dropped 11% from a year ago to $5.34 billion, stemming from the sale of company-owned restaurants to franchisees.

Investors have been bullish on McDonald's, which in the past year has attracted customers with new initiatives such as food delivery, a mobile app and discounted drinks. But some have questioned whether the company can maintain the growth.

"2017 was a strong year for McDonald's as customers responded to the many ways we are making their experience more convenient and enjoyable," Chief Executive Steve Easterbrook said in prepared remarks.

The company expects another boost midyear when it rolls out its fresh beef Quarter Pounders, though some analysts worry a new value menu introduced after the close of the fourth quarter will eat into profitability.

Finance chief Kevin Ozan said the company expects to spend about $2.4 billion of capital in 2018, most of which will go toward upgrading its restaurants as part of its "Experience of the Future" initiative. It also plans to open about 1,000 new locations this year.

Overall for the quarter, McDonald's reported a profit of $698.7 million, or 87 cents a share, compared with $1.19 billion, or $1.44 a share, a year ago. Excluding charges related to the new U.S. tax law, the company earned $1.71 a share, up from $1.43 in the year-earlier period. Analysts had expected adjusted earnings per share of $1.59.

The company booked a $1.2 billion tax charge related to foreign earnings, which was partly offset by a $500 million benefit from revaluing deferred tax assets and liabilities due to the new lower corporate tax rate.

McDonald's shares, up 45% in the past 12 months, slid less than 1% in premarket trading.

Write to Cara Lombardo at cara.lombardo@wsj.com

(END) Dow Jones Newswires

January 30, 2018 09:21 ET (14:21 GMT)

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