Value and menu innovation drive McDonald's sales

McDonald's income rose 9 per cent in 2010 thanks to new menu additions.

Net income totaled $4,946.3 million, equal to $4.58 per share on the common stock, up 9 per cent from $4,551 million, or $4.11 per share, in fiscal 2009.

Full-year results benefited from a strong fourth quarter in which income rose 2 per cent behind additions to the McCafe coffee lineup and continued demand for the McRib sandwich.

Revenues for the year climbed 5 per cent to $16,233.3 million, up from $15,458.5 million in fiscal 2009.

"We generated strong sales and delivered profitable market share growth, along with higher global revenues, operating income and earnings per share," said Jim Skinner, chief executive officer. "McDonald's continued success demonstrates that our Plan to Win works in any environment and has positioned us to continue our performance in 2011."

Global comparable sales rose 5 per cent in the fourth quarter, with sales in the United States up 4.4 per cent, sales in Europe up 3.4 per cent and sales in Asia/Pacific, Middle East and Africa up 5.5 per cent.

McDonald's said sales in the United States benefited from an emphasis on driving customer traffic, menu innovation and compelling value. During the fourth quarter, the company featured Chicken McNuggets and McRib on the menu, and drove brand loyalty and enhanced the customer experience with the Monopoly promotion and the introduction of the Caramel Mocha to the McCafe line-up.

"McDonald's continues to operate from a position of strength," Mr. Skinner said. "Our recurring cash flow and strong balance sheet allow us to invest appropriately in our business and return significant amounts of cash to our shareholders. In 2011, we plan to invest about $2.5 billion of capital - roughly half dedicated to opening approximately 1,100 new McDonald's restaurants and the other half allocated to investing in our existing locations, including reimaging."