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McDonald’s ends 2009 on sales upswing

OAK BROOK Ill. Although most of the restaurant industry is thankful 2009 has ended, quick-service leader McDonald’s Corp. showed that the past year wasn’t all bad, announcing better-than-expected fourth-quarter profit and a 9-percent growth in annual earnings per share. Its U.S. sales trends have also begun to improve.

While the company’s 2.3-percent global same-store sales growth in the fourth quarter was its lowest worldwide figure in quite some time, chief executive Jim Skinner said, “As we begin 2010, McDonald’s January global comparable-sales trend remains positive.”

In the United States, McDonald’s same-store sales had dipped into negative territory in October and November, mostly because of the rising unemployment that has reduced consumer spending, especially during the commute-heavy breakfast daypart. Even with same-store sales declines of 0.1 percent in October and 0.6 percent in November — before returning to a positive 1 percent growth in December — McDonald’s sales trends still outpaced the overall quick-service segment.

Oak Brook-based McDonald’s said its return to positive territory was aided by its attack on weak macroeconomic trends on several fronts. First it promoted the low end of its pricing structure with heavy advertising of its Dollar Menu and the debut of a Dollar Menu at breakfast. The chain also bolstered its premium offerings for consumers who are trading down from fast casual and casual dining, rolling out its McCafé line of espresso beverages in May and the Angus Third Pounder burgers in July.

As a result, global same-store sales for the full year rose 3.8 percent, reflecting gains of 2.6 percent in the United States, 5.2 percent in Europe and 3.4 percent in the Asia-Pacific, Middle East and Africa division.

“McDonald’s 2009 results reflect the broad-based strength of our global business,” Skinner said. “Our in-demand food and beverages, unparalleled convenience and superior value at every level of our menu enabled us to serve 60 million customers per day during 2009, up 2 million per day over the prior year.”

For the Dec. 31-ended fourth quarter, McDonald’s earned $1.22 billion, or $1.11 per share, an increase of 23 percent over year-ago earnings of $985.3 million, or 87 cents per share.

The latest quarter included a per-share gain of 8 cents related to the resolution of certain liabilities stemming from its 2007 Latin American development rights transaction.

Revenue for the fourth quarter totaled $5.97 billion, a 7-percent increase from the same quarter a year earlier.

For the full year, McDonald’s earned $4.55 billion, or $4.11 per share, versus 2008 earnings of $4.31 billion, or $3.76 per share. Fiscal 2009 total revenue fell 3 percent to $22.74 billion, reflecting a 7-percent decline in sales at U.S. corporate locations mainly because of its refranchising efforts.

Contact Mark Brandau at [email protected].

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