McDonald’s focus on value and a big new burger drive sales in the first quarter

McDonald’s posted better-than-expected sales in the first quarter as a new burger — and a continuing emphasis on value — brought in customers.

The company said its global same-store sales, or sales at locations open at least a year, rose 3.8% in the January-March period. That was better than the 3.7% increase Wall Street was expecting, according to analysts polled by FactSet.

McDonald’s shares rose nearly 3% before the opening bell Thursday.

The limited-time Big Arch burger —- a 1,610-calorie behemoth that went on sale in the U.S. last month — became a viral sensation after McDonald’s CEO Chris Kempczinski posted a video of himself taking a nibble from one. Kempczinski was mocked for his tentative bite. Tom Curtis, president of rival Burger King, posted his own video taking a vigorous bite of his chain’s new Whopper.

But the Big Arch did capture peoples attention. McDonald’s said U.S. customers spent more per visit in the first quarter than the same period a year ago.

McDonald’s has leaned heavily into value menus in the U.S. and abroad as prices, particularly gasoline prices, rise. Starting April 21, McDonald’s U.S. stores began offering 10 items that each cost less than $3.

The Chicago chain said its revenue rose 9% in the first quarter to $6.52 billion. That was also higher than the $6.47 billion Wall Street was expecting, according to FactSet.

McDonald’s net income rose 6% to $1.98 billion. Adjusted for one-time items, the company earned $2.83 per share. That was also higher than analysts’ forecast of $2.74.

Brought to you by www.srnnews.com

Click here to read the full article