McDonald’s Corp.’s fourth-quarter earnings were more promising than the string of dismal figures that shook investor confidence in the fast food giant late last year. But the Golden Arches have yet to reclaim their full luster.
The Oak Brook, Ill., company said it eked out a 0.1% global same store sales increase in the fourth quarter compared to the same period a year earlier, allowing it to beat analyst expectations. Net income rose 1% to $1.4 billion, or $1.38 a share, while revenue got a 2% boost to $6.95 billion.
In the U.S., which last month saw the return of the popular McRib seasonal offering, comparable sales jumped 0.3%.
Elsewhere in the world, the chain encountered weakness during the quarter.
Same store sales in Europe, McDonald’s top market by revenue, dipped 0.6% as fewer customers ate at the restaurants. A 1.7% decline in the Asia Pacific, Middle East and Africa regions was attributed largely to weakness in the Japanese market.
“McDonald’s continued to grow by remaining focused on what matters most to our customers, although our results reflect the impact of the challenging global operating, economic and competitive environment,” Chief Executive Don Thompson said in a statement.
He added that with near-term “top- and bottom-line growth to remain pressured,” the chain’s sales will likely fall in January.
Many analysts looked to the quarterly report to signal Thompson’s viability as head of one of the food industry’s top players. He has only held the post since July, when he took over for his retiring predecessor Jim Skinner.
Motley Fool analyst Blake Bos said consistently strong financial performance from a company of McDonald’s size and historical dominance is difficult to achieve.
“They’re already so saturated and so good at what they do, where can they really go?” Bos said. “It’s not prudent to expect huge things out of that market. And it’s so competitive nowadays, with fast-casual rivals coming into play and Wendy’s and Burger King trying to get in there.”
For the full year, McDonald’s global same store sales swelled 3.1%. Revenue boomed 2% to $27.6 billion while profit slipped 1% to $5.5 billion, or $5.36 a share.
Comparable sales rose internationally, up 3.3% in the U.S., 2.4% in Europe and 1.4% in the Asia Pacific, Middle East and Africa sector.
McDonald’s said it also plans to invest $3.2 billion this year to open up to 1,600 new branches. It also plans to redesign more than 1,600 current locations.