Breakfast bump: McDonald’s US sales jump 5.7 per cent

NEW YORK, N.Y. – McDonald’s says offering breakfast around the clock helped jolt its sales.

Sales at the world’s biggest hamburger chain rose 5.7 per cent in the U.S. for the final three months of 2015, boosted by unseasonably warm weather and the launch of an all-day breakfast menu in October.

That marked the second straight quarter of domestic growth as McDonald’s fights to win back customers, and the best showing since early 2012. Globally, sales rose 5 per cent at established locations.

McDonald’s, which has more than 36,000 locations around the world, is working to turnaround its business under CEO Steve Easterbrook, who will mark one year on the job in March. The Oak Brook, Illinois, company has conceded that it failed to keep up with changing tastes, and that order speed and accuracy suffered as its menu grew more expansive.

Despite the encouraging finish to the year, McDonald’s has a long way to go. For all of 2015, U.S. customer visits fell 3 per cent at established McDonald’s locations. That followed a 4.1 per cent drop the previous year. Guest counts declined globally as well during the period.

In a call with analysts, Easterbrook cautioned that the company wanted to see another quarter or two of positive results before shifting gears from turnaround mode to a focus on growth.

The launch of all-day breakfast has been one of the company’s most high-profile manoeuvrs under Easterbrook. The decision to make select items like the Egg McMuffin available around the clock generated a surge of national media coverage. Fans of McDonald’s breakfast had long complained of being unable satisfy their cravings later in the day.

As the initial fanfare settles down, Easterbrook said McDonald’s would keep momentum going by focusing on areas like improving order accuracy and a recently launched mobile app. In early January, McDonald’s also introduced a “McPick 2 for $2” menu intended to draw bargain hunters.

The quarterly performance may also have gotten a boost from a culling of underperforming stores. McDonald’s finished the year with 14,259 stores in the U.S., a decline of 91 stores from the previous year.

It was the first time McDonald’s ended the year with fewer U.S. restaurants since at least 1970, according to an Associated Press review of regulatory filings.

Sales for the “International Lead” unit, which includes the United Kingdom and Canada, rose 4.2 per cent during the fourth quarter. In the high-growth markets unit, which includes Russia and China, sales climbed 3 per cent.

For the three months ended Dec. 31, McDonald’s Corp. earned $1.21 billion, or $1.31 per share. Not including a gain from the sale of a property and other charges, the company earned $1.28 per share. That beat Wall Street expectations for $1.23 per share, according to FactSet.

Total revenue was $6.34 billion, also topping the $6.24 billion analysts expected.

For the year, total revenue fell 7 per cent to $25.4 billion, hit by unfavourable currency exchange translations. Profit fell 5 per cent to $4.53 billion.

Shares of McDonald’s closed up 80 cents at $119.20.

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