The fast-food giants have stopped using margarine on the breakfast favourite, and have started to use butter instead. The company reported their third-quarter earnings earlier this week, posting huge gains over recent years. The shares of the company weren’t expected to cross $1.28 a share this quarter.
While this is bad news for our waistlines, it has been good news for the franchise, who have seen a 9 per cent increase in sales since making the change. “We’re running better restaurants than we were a year ago”, McDonald’s CEO Steve Easterbrook told analysts Thursday. The customer numbers were still falling.
McDonalds’ sales were declining over the past two years, and the fast food company had to think of something quick. The results topped Wall Street’s expectations.
Interestingly, Easterbrook was coy when asked about the All Day Breakfast campaign, saying that it is still too early to judge whether the new menu initiative is working for McDonald’s. Consumers were demanding this for a long time.
The company’s “back-to-basics” strategy, which includes trimming down the menu items and improving on order accuracy, has significantly paid off in the third quarter, as McDonald’s reported its first USA sales improvement in the last 2 years.
The stock went to an all-time high of $111 before finally closing at $110.86 which shows an increase of 8%. The move was appreciated by most stakeholders since it had the potential of helping the bottom line of the company.
R.J Hottovy, a senior analyst from Morningstar, believes that one of the reasons for McDonalds to roll out the all-day breakfast so quickly is a sign that the business is improving behind the scenes as well, including a smoother delivery network from supplier to restaurant.
All-day breakfast is something that franchisees “have been asking for years”, Easterbrook said, but it will still take time to work out some hiccups. We are trading customers down from regular menu to lower-priced breakfast items. There’s a lot more room for improvement, Easterbrook said.
He said the company will also continue to focus on value. By the fourth quarter, he expects established-store sales to be positive worldwide.
McDonald’s has seen sales of the Egg McMuffin soar in recent months – and it’s all thanks to a very simple change.
The Oak Brook company earned $1.31 billion, or $1.40 per share in the three months that ended August 31, compared with $1.07 billion, or $1.09 per share, last year.