* Q1 EPS $1.23, in line with Street view
* Q1 same-restaurant sales up 7.3 pct
* Sees comparable sales up 4 percent for April
* Shares up more than 2 percent
By Lisa Baertlein
April 20 McDonald's Corp reported higher
quarterly profit on Friday, boosted by better-than-expected
sales at established restaurants in the United States and its
top revenue market of Europe.
McDonald's shares rose 2.1 percent as investors breathed a
sign of relief over results from Europe, where national debt
woes, widespread austerity measures and high unemployment have
made demand for American fast-food volatile.
The first-quarter results, boosted by a focus on low-priced
food, new menu items, restaurant makeovers and longer operating
hours, helped McDonald's continue to outpace rivals like Wendy's
Co and Burger King Corp.
Sales at restaurants open at least 13 months were up 7.3
percent, more than the 6.7 percent increase expected by analysts
polled by Consensus Metrix. Same-restaurant sales rose 5 percent
in Europe and 8.9 percent in the United States, where mild
weather has helped lift restaurant sales.
"People have been most concerned about Europe and it looks
like it's OK," said Bernstein Research analyst Sara Senatore.
Investors had good reason for caution.
McDonald's global same-restaurant sales for February missed
Wall Street's target due to a harsh winter and economic upheaval
Europe's results for March, reported on Friday, topped
expectations as McDonald's increased its focus on low-cost food
offered via Germany's "value menu" and the United Kingdom's
"France is also evaluating options to further strengthen
value perceptions at a time when a number of new austerity
measures are impacting consumers' confidence and their
disposable income," said Chief Operating Officer Don Thompson,
who will succeed retiring Chief Executive Jim Skinner in July.
McDonald's rival Yum Brands Inc, parent of the KFC,
Pizza Hut and Taco Bell chains, on Thursday said recent results
in Europe were marked by choppiness and "some weakness."
McDonald's, the world's biggest hamburger chain, expects its
momentum to continue in April, and forecast a 4 percent rise in
global same-restaurant sales for the month.
First-quarter net income rose almost 5 percent to $1.27
billion, or $1.23 per share, in line with analysts' average
forecast, according to Thomson Reuters I/B/E/S.
"If it weren't for higher food cost, the numbers in terms of
earnings growth would have been better," Edward Jones analyst
Jack Russo said.
Revenue jumped 7 percent to $6.55 billion.
In Asia/Pacific, Middle East and Africa (APMEA),
first-quarter same-restaurant sales were up 5.5 percent,
slightly less than the 5.9 percent analysts expected, due to
lower franchise margins.
Shares in McDonald's rose to $97.26 in midday trading on the
New York Stock Exchange, where they have gained more than 20
percent over the last 12 months.