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McDonald's sales in US edge up for first time in 2 years

McDonald's sales in US edge up for first time in 2 years; profit tops expectations

McDonald's sales in US edge up for first time in 2 years

NEW YORK (AP) -- McDonald's sales edged up at established U.S. locations during the third quarter, snapping a streak of about two years of quarterly declines.

The world's largest burger chain also said sales rose 4 percent on a global basis at established locations. In the U.S., the figure rose 0.9 percent. The last time the figure rose in the U.S. was for the third quarter of 2013.

Shares jumped sharply and struck an all-time high in early trading.

The company attributed the uptick in the U.S. for the period ending Sept. 30 to menu changes as it tries to win back customers and adapt to changing palates and preferences.

McDonald's introduced a fried chicken sandwich and switched back to butter for its Egg McMuffins, instead of margarine. It's toasting its buns longer and searing burgers. It has also been simplifying its menu and it's making other changes, like shifting to cage-free eggs.

All of the changes have come under a new CEO, Steve Easterbrook, who took the helm in March. Earlier this month, the company introduced "all-day breakfast," meaning you can get an Egg McMuffin whenever the craving strikes.

It is also making changes based on broader economics, like a move away from the popular Dollar Menu. Though the menu had become very popular since it was first introduced in 2002, costs for ingredients like beef and cheese have climbed and made it difficult for franchisees to make money.

The company needs to make up lost ground. In the year ago period, sales declined 3.3 percent at established U.S. locations as customer visits dropped. McDonald's has acknowledged that it failed to keep up with changing tastes and that service suffered as its menu mushroomed.

Easterbrook has said he wants to transform McDonald's into a "modern, progressive burger company." That has included a pay bump for some workers at company-owned locations amid protests calling on McDonald's and others to give fast-food workers $15 an hour.

McDonald's said its operating income in the U.S. fell 1 percent during the quarter as a result of its pay hike and other benefits, but that the move would pay off with better performing restaurants.

For 2015, the company is also closing underperforming stores in the U.S. That is expected to mark the first contraction by locations in at least 1970, according to an Associated Press review of regulatory filings.

For the final three months of the years, Easterbrook expects comparable sales to be positive once again in all segments. In the U.S., the period would reflect the beginnings of the all-day breakfast rollout.

The company, based in Oak Brook, Illinois, has more than 36,000 locations around the world.

For the three months ended Sept. 30, the company said Australia and the United Kingdom delivered a strong performance. In China, where it was hit with supplier problems, McDonald's said its sales performance was "very strong."

For the quarter, McDonald's Corp. earned $1.31 billion, or $1.40 per share, topping the $1.27 per share analysts expected.

Revenue was $6.62 billion, also above the $6.41 Wall Street expected, according to FactSet.

Shares jumped nearly 7 percent to $109.40.

Updated : 2021-09-17 00:13 GMT+08:00