Fewer people came to McDonald's for Egg McMuffins and other breakfast items as competition for morning diners has heated up. But the company still posted strong first-quarter financial results and its stock soared more than 5 percent Monday.
The fast-food chain said the number of customer visits fell in the U.S., partly because of increasing breakfast competition. McDonald's didn't name its competitors, but Burger King, Dunkin' Donuts and others have updated or expanded their breakfast menus recently.
McDonald's said sales rose 2.9 percent at established U.S. restaurants, but mainly due to higher prices on its menu. Worldwide, that figure rose 5.5 percent, which is a lot stronger than the 3.6 percent increase that industry analysts had forecast, according to FactSet.
The company has worked to expand its U.S. business — its largest market — with new initiatives, like swapping out frozen beef patties for fresh ones in its Quarter Pounder burger. It also launched a new value menu earlier this year, reviving its once-popular Dollar Menu with items priced at $1, $2 or $3. The idea is to get people in for cheaper items who then upgrade to pricier ones or add on food their meals.
McDonald's is also in the midst of redesigning its U.S. restaurants, adding more touch-screen kiosks for customers to order from, and expanding delivery nationwide.
The Oak Brook, Illinois-based company earned $1.38 billion, or $1.72 per share, for the period ended March 31. A year earlier, it earned $1.21 billion, or $1.47 per share. Adjusted earnings came to $1.79 per share, beating Wall Street expectations by 12 cents, according to Zacks Investment Research.
Total revenue declined 9 percent to $5.14 billion, but still beat expectations. McDonald's said the revenue drop was due to its ongoing move to convert more company-owned restaurants into franchised ones.
Shares of McDonald's Corp. rose $8.33 to $166.63 in trading Monday.
Portions of this story were generated by Automated Insights using data from Zacks Investment Research. Access a Zacks stock report on MCD at https://www.zacks.com/ap/MCD