(Reuters) - McDonald’s Corp (MCD.N) blew past analysts’ forecasts for profit and sales on Monday, helped by strength in overseas markets and U.S. consumers on average spending more in its restaurants.
Shares in the world’s biggest fast food chain by revenue rose nearly 5 percent as global same-restaurant sales topped Wall Street forecasts, helped by strength in mature markets in the United Kingdom and Germany.
The stock was the top gainer on the Dow Jones Industrial Average .DJI.
The results underscore the success of Chief Executive Steve Easterbrook’s multi-year turnaround plan launched in 2015 to refresh McDonald’s menus, add more technology to stores and make outlets more welcoming for customers.
New changes also included adding more high-margin “gourmet” burgers which use fresher and more expensive ingredients and cost $6 or $7 a time, and new $1 to $3 value options.
McDonald’s and other fast food chains have been concentrating on drawing customers with cheap options as they battle for a bigger share of a pie that is not growing. Monday’s results, however, suggest that while that may be working, the average check value in its U.S. restaurants is rising.
“The value price menu does bring people in, but people tend to spend more ... people still want a number of key McDonald’s items like the Quarter Pounder and the Big Mac,” Tigress Financial Partners analyst Ivan Feinseth.
“(They) are still the biggest sellers.”
Same-restaurant sales in its most profitable market, the United States, rose by 2.9 percent, topping analysts expectations of 2.7 percent, according to Thomson Reuters