The golden arches delivered impressive first quarter results that exceeded analyst expectations, thanks to a massive new menu item and strategic pricing moves that drew customers back to restaurants.
McDonald’s reported that same-store sales at locations operating for at least 12 months climbed 3.8% worldwide during the January through March period. Financial experts surveyed by FactSet had anticipated a 3.7% gain.
Stock prices for the fast-food giant jumped nearly 3% in pre-market trading Thursday following the earnings announcement.
The spotlight fell on McDonald’s limited-time Big Arch offering — a massive 1,610-calorie sandwich that launched in American markets last month and quickly became an internet phenomenon. The buzz started when McDonald’s CEO Chris Kempczinski shared a video of himself sampling the burger with what many viewed as an overly cautious bite. The clip drew ridicule online and prompted Burger King’s president Tom Curtis to post his own video enthusiastically chomping into his company’s new Whopper.
Despite the social media mockery, the Big Arch successfully grabbed consumer attention. McDonald’s reported that American customers increased their average spending per restaurant visit compared to the same three-month period last year.
The Chicago-based corporation has doubled down on affordable menu options both domestically and internationally as consumers face rising costs, especially at gas pumps. Beginning April 21, McDonald’s locations across the United States introduced a selection of 10 menu items priced under $3 each.
Total revenue climbed 9% during the quarter to reach $6.52 billion, exceeding Wall Street’s $6.47 billion projection according to FactSet data.
The company’s net income increased 6% to $1.98 billion. When accounting for one-time adjustments, McDonald’s earned $2.83 per share, beating analyst forecasts of $2.74.
