McDonald's Adds Butter, Snaps 2-Year Earnings Skid

Chain credits menu changes for uptick
By Newser Editors and Wire Services
Posted Oct 22, 2015 11:41 AM CDT
McDonald's Adds Butter, Snaps 2-Year Earnings Skid
In this Oct. 10, 2015, photo, the sun sets behind a McDonald's restaurant in Ebensburg, Pa. McDonald's reported quarterly financial results on Thursday.   (Gene J. Puskar)

McDonald's sales just snapped a two-year losing streak, edging up at US locations during the third quarter. Sales rose 0.9%, while globally they rose 4%, and the company expects the trend to continue in the final quarter. As a result, shares jumped nearly 7% to $109.40, striking an all-time high in early trading. McDonald's attributed the US sales uptick to menu changes as it tries to win back customers and adapt to changing palates and preferences. McDonald's introduced a fried chicken sandwich and switched back to butter instead of margarine for its Egg McMuffins. Food prep tweaks include toasting buns longer and searing burgers; it's also simplified its menu and has plans to shift to cage-free eggs.

McDonald's needs to make up lost ground. In the year-ago period, sales declined 3.3% at established US locations as customer visits dropped. McDonald's has acknowledged that it failed to keep up with changing tastes and that service suffered as its menu mushroomed. But now, "customers are noticing the differences" in the changes being made, says CEO Steve Easterbrook, who took the helm in March. In hopes of sparking a turnaround, Easterbrook is presiding over other big changes as well: Earlier this month, the company introduced "all-day breakfast" in the US. Easterbrook has said he wants to transform McDonald's into a "modern, progressive burger company, which has included a pay bump for workers at company-owned locations. (Not everyone loves the all-day breakfast.)

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