McDonald’s Corp., the world’s biggest fast-food chain, said on Monday that its fourth-quarter profits increased by 2.1 percent due to increased demand.
The Oak Brook, Ill.-based company said that net income increased from $1.22 billion a year ago to $1.24 billion, or $1.16 per share. Revenues jumped 4 percent to $6.21 billion.
The earnings results topped Wall Street analysts’ expectations as McDonald’s drew customers to its 32,000 stores worldwide. The company in recent months have introduced dozens of new offerings—including bringing back the McRib sandwich, Angus snack wraps, and serving coffee and smoothie beverages in the United States to compete with coffeehouse chain Starbucks Corp.
The company has also diversified its range of product offerings: in the U.S. market it has started to sell oatmeal for breakfast. Popularity at McDonald’s continues to soar as rivals such as Burger King and Wendy’s/Arby’s Group struggle to grow their businesses.
Some of McDonald’s biggest rivals are looking to shed non-core businesses. Wendy’s last week said that it is exploring options to spin off its Arby’s chain of restaurants. Yum! Brands Inc., which owns KFC and Pizza Hut, is exploring ways to divest its Long John Silver’s chain of restaurants.
“During 2010, we continued our efforts toward becoming our customers' favorite place and way to eat and drink—and customers rewarded us by visiting our restaurants more often," said McDonald's Chief Executive Officer Jim Skinner in a company statement. "As a result, we generated strong sales and delivered profitable market share growth, along with higher global revenues, operating income and earnings per share.”
The company admitted that severe weather both in Europe and the Northeastern part of the United States affected store traffic, but Europe nevertheless was stable. France and Russia led all nations in Europe with 2 percent growth in revenues. Asia Pacific, Middle East, and Africa also increased their revenues, with Australia, China, and Japan increased by 18 percent.
Same-store sales, comparing revenues at stores open at least a year, row in the United States by 2.6 percent, and 9 percent in Asia Pacific, Middle East, or Africa, the company said.
“We are off to a good start in 2011 – our momentum is continuing in January with global comparable sales expected to increase 4-5%,” Skinner said.