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McDonald’s raises prices and still posts stellar sales

McDonald's is putting uninformed beef in a Quarter Pounder

McDonald’s is lifting prices, and it’s not scaring off fans of a Big Mac.

More business showed adult during a Golden Arches for a fifth entertain in a row. Demand was clever in a United States, Europe and China.

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Shares of McDonald’s (MCD) rose 5% in early trade Monday on a news. The association has wowed Wall Street and won behind business underneath a care of Steve Easterbrook, who took over as CEO in Mar 2015.

McDonald’s is emphasizing a heading value options, though lifting prices for burgers, fries and other equipment elsewhere on a menu.

Why are menu prices going up? Commodity costs are rising around a creation — quite for food. Several restaurants and consumer products companies are augmenting their prices so increase don’t take a hit.

But flitting on those aloft costs to business clearly didn’t harm McDonald’s. Shares rose 5% Monday after it reported benefit and sales that surfaced forecasts. The association has wowed Wall Street and won behind business underneath a care of Steve Easterbrook, who took over as CEO in Mar 2015.

Raising prices wasn’t a problem for Chipotle (CMG), either. The Mexican food sequence reported plain sales and distinction final week, in partial given of aloft prices on a menu.

More companies are realizing that if there is clever direct for their products, a economy is healthy adequate that business will compensate more.

Netflix (NFLX) recently lifted subscription prices, and that hasn’t harm subscriber growth during all. Amazon (AMZN) announced final week that it is raising a cost of a annual Prime service from $99 to $119.

Related: Coke and Hershey’s costs are going up. Will we compensate more?

At McDonald’s, altogether sales were down given a association is offered some-more of a corporate-owned restaurants to franchisees. But same-store sales growth, that measures a opening of restaurants open during slightest a year, was stellar.

Same-store sales rose 2.9% in a United States and 5.5% globally, led by clever formula in a UK, Germany, China and Italy. Those are a numbers that Wall Street cares about.

McDonald’s has introduced several new menu equipment during a past 3 years that have been hits with customers, such as kale salad, a burger with Sriracha salsa and uninformed beef in a Quarter Pounders.

Related: McDonald’s is putting uninformed beef in a Quarter Pounder

So McDonald’s isn’t only benefiting from higher-priced burgers and fries. It has also embraced record some-more underneath Easterbrook, and that’s attracting some-more customers.

McDonald’s now has an app that lets business sequence and compensate on their phones. It’s experimenting with self-ordering kiosks in restaurants. And it has a smoothness partnership with Uber Eats.

Wall Street is a large fan of all these changes, too. McDonald’s batch is adult scarcely 70% given Easterbrook took over in 2015.

That’s some-more than twice a benefit of a SP 500 and tip opposition Restaurant Brands (QSR), a owners of Burger King, during a same time. McDonald’s batch has outperformed Yum Brands and Wendy’s (WEN), too.



Article source: http://money.cnn.com/2018/04/30/investing/mcdonalds-earnings/index.html