McDonald’s earnings feast on all-day breakfast

McDonald’s introduction of its all-day breakfast helped to lift sales by 5.7 percent in the US, marking the second straight quarter of domestic growth as it fights to win back customers. Earnings per share were $1.31. On average, 25 analysts polled by Thomson Reuters expected earnings of $1.28 per share.

The International Lead segment’s comparable sales climbed 4.2% as Canada, the United Kingdom and Australia saw strong performances resulting from higher margins among McDonald’s franchises.

It was all part of Easterbrook’s strategy to turn McDonald’s into a “modern, progressive burger company” – marketing jargon for tastier and fresher food.

Revenue fell 3.5 per cent to US$6.34 billion, mainly due to a strong dollar, but beat the average analyst estimate of US$6.22 billion.

Many McDonald’s fans had been calling on the company for years to make Egg McMuffins, hash browns and other early morning treats available at lunch or dinner time.

Under Chief Executive Steve Easterbrook, who took the helm last year, McDonald’s has announced a stream of initiatives – from curbing antibiotics use in its chicken supply and simplifying its menu to creating a new global corporate structure – to refresh the company’s image and end a sales slump that started several years ago.

Excluding the impact of these current and prior year items, earnings per share in constant currencies would have increased $0.13 or 10% for the quarter and $0.12 or 2% for the year.

McDonald’s all-day breakfast initiative appeared to further strengthen the fast-food giant’s recovery after a long period of falling sales.

McDonald’s also said it would refranchise about 4,000 restaurants through 2018 to become 95 percent franchised, up from its previous target of selling 3,500.

The company said there was broad strength across Asia and Europe, and solid sales gains in emerging markets like Russian Federation and China.

Sales at restaurants open at least a year jumped 5% globally, including a 5.7% increase in the USA, for the quarter ending December 31.