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McDonald's plans 'Fish McBites' to boost sales

Published on NewsOK Modified: January 23, 2013 at 2:53 pm •  Published: January 23, 2013
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For the October-to-December period, McDonald's said sales at restaurants open at least a year rose 0.1 percent globally and 0.3 percent in the U.S. But in Europe, McDonald's biggest market, the figure fell 0.6 percent as guest counts declined. It fell 1.7 percent in the region encompassing Asia, the Middle East and Africa.

In China, where the figure fell 0.9 percent, McDonald's downplayed the effect of recent public concerns over its chicken suppliers. Yum Brands Inc., which owns KFC, has said it expects its sales in the region to fall 6 percent, in part because of the issue.

The figure is an important measure of a restaurant chain's performance because it strips out the impact of newly opened and closed locations.

Howard Penney, a restaurant analyst for Hedgeye Risk Management, questioned McDonald's recent emphasis on value and noted that operating profit margins fell globally for the quarter. When sales are up but margins are down, that means "you're giving away food," he said.

Moving forward, however, the company said it didn't plan to add many items to its Dollar Menu unless they are more profitable items, such as the cheddar grilled onion burger that was introduced in December.

McDonald's Corp., based in Oak Brook, Ill., said it earned $1.4 billion, or $1.38 per share, for the quarter. That compares with $1.38 billion, or $1.33 per share, a year ago.

Revenue rose to $6.95 billion, up from $6.82 billion.

The results topped expectations for profit of $1.33 per share on revenue of $6.9 billion.

In the year ahead, the company expects costs for ingredients to rise 1.5 percent to 2.5 percent. Labor costs will also continue pressuring profit margins, executives said.

Thompson, who took over as CEO this summer, said the company continues to target total sales growth of 3 percent to 5 percent over the long term. McDonald's plans to open between 1,500 and 1,600 restaurants this year. It currently has about 34,000.

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Follow Candice Choi at www.twitter.com/candicechoi