Sales At McDonald’s Rise After Revamping Of Menu in 1Q

Sales at fast food chain McDonald’s were strong in this year’s first quarter and this has resulted in the price of the stock jumping by around 5%. The strong sales have been attributed to the fact that the restaurant chain has revamped stores and added new items to the menu. Additionally McDonald’s has turned to fresh beef burgers in place of frozen beef burgers.

In the United States McDonald’s boasts of 140,000 locations and the discounted offerings have helped push sales. The same has also happened in McDonald’s stores located in the United Kingdom, Germany, Italy and China.

“They’re appealing to the value customer and appealing to the customer who also wants a slightly nicer atmosphere. McDonald’s is going to start taking back some market share,” an analyst at BTIG, Peter Saleh, said.

Same-store sales

The growth in sales was better than analysts had expected. Per Consensus Metrix analysts had estimated same-store sales to grow by 3.8% but the eventual figure was 5.5%. In the United States the growth in same-store sales was 2.9% and this also beat projections and was in line with the trend for the last three years.

Earnings per share were $1.79 in the quarter and this was higher than the $1.67 analysts had been expecting. McDonald’s revenues came in at $5.14 billion and this higher than the estimates – $4.97 billion.

In order to continue on the growth trajectory the chief executive officer of McDonald’s, Steve Easterbrook, intends to add new menu items as well as revamp more restaurants. Previously the fast food chain had committed $2.4 billion for the store remodeling efforts in the United States. New locations are also set to be opened.

Technology and delivery

Additionally McDonald’s is also investing in the modernization of its technology. The fast food chain is also making a big push with regards to delivery in order to increase sales to customer’s offices and homes. One of McDonald’s partners in delivery is UberEats. Plans are also underway in the United States to ensure the chain only sources cage-free eggs.

The international lead segment of McDonald’s saw same-store sales rise by 7.8%. In South Korea and China the level of growth in same-store sales was 7.8% and this was higher than what had been estimated. McDonald’s intends to double the number of stores it has in China in the next half a decade as competition among fast food chains in the world’s most populous

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