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Wednesday, April 22, 2009

McDonald's profit rises nearly 4 percent, Despite Stronger dollar

McDonald's Corp. (MCD) reported a modest rise in first-quarter earnings Wednesday as a healthy increase in same-store sales and a one-time gain helped offset currency headwinds from a stronger dollar.

McDonald's Corp. said Wednesday that its first-quarter profit climbed nearly 4 percent as more customers worldwide came to the Golden Arches for a cheap meal. MCD said that it earned $979.5 million, or 87 cents a share, up from $946.1 million, or 81 cents a share, in the year-earlier period. The latest figures include a 4-cents-a-share gain on the sale of the company's minority interest in Redbox Automated Retail and an 8-cents-a-share negative impact from currency conversion.

Revenue slipped to $5.08 billion from $5.61 billion, reflecting currency and the sale of company-owned restaurants. Same-store sales worldwide rose 4.3%.
The average estimate of analysts polled by FactSet Research had been for the company to earn 82 cents a share on sales of $5.23 billion of sales.

In the U.S., same-store sales were up 4.7% in the U.S., and Europe rose 3.2% while the Asia-Pacific, Middle East and Africa region was 5.54% higher.

April same-store sales are "trending at least as strong or better than first-quarter sales in every area of the world," said Jim Skinner, chief executive, in the earnings report.
The company continues to gain market share as customers are attracted by tiered-pricing menus, seasonal food events and longer store hours, it said.

The fast-food behemoth has to date been one of the few beneficiaries of the economic downturn, posting hefty sales and profit increases as cash-strapped consumers "trade down" from pricier dining options and take advantage of extended hours and expanded menu offerings. It's also been getting a lift from the easing prices of fuel and some other commodities.

Disclosure I am long MCD.

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