April 22--McDonald's on Friday reported another strong season of higher profit and better-than-expected U.S. sales growth, thanks to the continued boost of all-day breakfast and its newest value promotion, McPick 2.
All-day breakfast, launched in October, has proven to be the driver for a desperately needed turnaround. The McPick 2 promotion, initially intended as an alternative to the dollar menu as food prices rose, has also proven to be a sales spark in recent months. The deal began as a 2-for-$2 deal but now features classic items like the Big Mac and Quarter Pounder with Cheese and costs $5 for two items.
The Oak Brook-based company said those two promotions helped drive sales at established restaurants in the U.S. up 5.4 percent in the first quarter. Established-store sales don't include stores open less than 13 months and are considered a key gauge of a restaurant company's health.
The world's largest burger chain earned $1.1 billion, or $1.23 per share in the first three months of the year, compared with $811.5 million, or 84 cents per share, a year ago.
Revenue fell 1 percent to $5.9 billion, hurt by currency translation.
"The turnaround plan we announced last year is grounded in enhancing these critical customer-driven elements, and I'm pleased to report that our turnaround is taking hold," CEO Steve Easterbrook said in a news release. "The ongoing investments we're making in running great restaurants and delivering what matters most to our customers are beginning to yield sustained positive results."
While it continues to strip out menu items to make its restaurants more efficient, McDonald's is testing new entrees it hopes will bring more customers through the door and the drive-thru. It revealed this week it is testing two new sizes of the Big Mac.
sbomkamp@tribpub.com
