McDonald's Stock Hits Record High on Global Growth
Investors are lovin' it when it comes to McDonald's. Shares in the world's biggest burger chain hit a record high Friday after the company reported robust quarterly profit and sales growth.
McDonald's (MCD) stock added 3.7%, or $3.32, to close at an all-time high of $92.33.
McDonald's helped propel the Dow Jones Industrial Average to a triple-digit gain Friday. The blue-chip index rose 267 points, or 2.3%, to finish at 11,809. The Dow is now positive for the year, up 1.6 percent.
Traders' enthusiastic response to McDonald's latest results appeared to be driven partly by the fact that recent price hikes didn't turn away customers. Price increases not only offset some inflation in food costs, said Jeffries analyst Andy Barish in a note to clients, but McDonald's also saw "relatively good customer reception" of those higher prices.
Or maybe shareholders just deserved a break today.
Either way, before the opening bell McDonald's said its third-quarter net income rose 9 percent year-over-year to $1.51 billion -- the fast-food chain's ninth straight quarter of profit growth.
Earnings beat Wall Street's forecast by 2 cents a share, according to a survey by Thomson Reuters. McDonald's 14 percent increase in revenue, to $7.17 billion, also exceeded analysts' average estimate.
McDonald's stock is now up 20 percent for the year-to-date. Meanwhile, the broader S&P 500 is still off 1.9 percent in 2011.
McDonald's success has hinged on quickly adapting to customers' changing tastes and reshaping itself as a hip, healthier place to eat. It has added menu items such as smoothies and oatmeal, remodeled restaurants, and converted more locations to 24-hour operations. All those moves, the company says, have brought in more customers.
Customer spending at McDonald's franchised and company-owned restaurants rose 5 percent, while in Europe, the company's largest market, the figure climbed 16 percent. For the Asia/Pacific, Middle East and Africa region, customer spending rose 20 percent.
The foreign gains were helped by the impact of currency translation -- when the dollar weakens, money made in other countries translates into more dollars in the U.S. -- but even without that effect, the gains outpaced the U.S. revenue growth.
The Associated Press contributed to this report.
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