McDonald's Meal Specials, New Menu Items Feeding Sales
31 January 2018 - 1:36AM
Dow Jones News
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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