Warm winter, Chicken McBites keep McDonald’s profit up


McDonald’s Corp., the world’s largest hamburger chain, keeps churning out a profit – this time due to unexpectedly balmy weather and new products such as oatmeal and Chicken McBites.

The company netted $1.27 billion in income, or $1.23 per share, in its first quarter. That’s a 5% increase from the $1.21 billion, or $1.15 per share, it earned during the same period in 2011.

Note the absence of one-time, game-changing accounting charges that have been seemingly omnipresent this earnings season.


McDonald’s revenue jumped 7.1% to $6.5 billion.

Even though McDonald’s is feeling pressure from rising food costs, it so far has managed to maintain a strong sales pace by maintaining a loyal base for its core burgers and fries while also branching into more healthful or premium options such as frappes and garden salads.

The model, ushered in by retiring Chief Executive Jim Skinner, has been so popular that competitors such as Burger King have recently begun copying it.

Same-store sales increased 7.3% at global McDonald’s branches open for more than a year, boosted in part by an extra leap year day.

In the U.S., where McDonald’s rolled out the Chicken McBites and revamped a horde of restaurants amid an unseasonably warm winter, the same-stores metric was up 8.9%. In Europe, the chain’s largest market (by revenue), sales were up 5% despite such hurdles as harsh weather and the continent’s debt crisis.

McDonald’s said its sales for the Asia, Middle East and Africa region -- where its expansion plans may overlap with Yum’s Taco Bell, KFC and Pizza Hut triumvirate -- were up 5.5%.

The chain’s shares were up $2.43, or 2.6%, to $97.71 in morning trading in New York.

It’s been a good quarter for the quick-service industry. On Thursday, fast casual Mexican-style chain Chipotle said it earned $62.7 million during its first quarter -- a 35.1% boom. Yum’s income soared 73% to $458 million, the company said Wednesday.



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