McDonald’s shares have hit record highs after its profits grew by 8% to $1.2bn (£950m) in the three months ending 31 March.
Although overall sales continue to fall, with revenues down 3.9% to $5.68bn and marking the 11th straight quarter of decline, this rate is slowing. Its Q1 sales performance also beat market estimates of $5.53bn.
McDonald’s is two years into CEO Steve Easterbrook’s turnaround plan and he says its Q1 performance was boosted by “higher than expected” growth in both the UK and China.
Speaking on an investor call today (25 April), Easterbrook didn’t seem too concerned by Brexit or talk that rising food inflation could cripple major high street brands.
He told investors: “There’s a lot of talk about people having less to spend but we’ve certainly not seen the business miss a beat in the UK. While others have got nervous about Brexit, we’ve not missed a beat and we are moving at real pace with our store experience programme.”
In its core US market, McDonald’s has suffered over recent years due to increased competition from the likes of Wendy’s and Burger King. However, sales at US restaurants open for more than 13 months rose 1.7% in the first quarter, topping analysts’ predictions for a 1.3% rise.
Easterbrook says McDonald’s is turning things around across the pond due to a “successful” turnaround strategy that is prioritising value, convenience and food quality, as well as the continued success of its decision to launch all-day breakfast menus in the US and Canada.
Efforts to improve the image of the McDonald’s brand in the US have included the recent announcement it will start using fresh instead of frozen beef for its Quarter Pounders by the end of 2018. And Easterbrook said the firm’s underlining aim was to “produce higher quality beef and chicken, a smaller carbon footprint and create far larger profits.”
Since the start of the year, shares in McDonald’s have risen 15%, giving the fast food giant a market value of $115bn.