Customers searching for a cheap meal are eating more Big Macs and other inexpensive food from McDonald's.
McDonald's profits climbed in the first quarter as cash-strapped customers worldwide came to the home of the Dollar Menu in search of a cheap meal.
The profits climbed nearly 4 percent, rising to $979.5 million from $946.1 million, in the quarter, which ended March 31, the company said Wednesday. That beat estimates from analysts.
New fried chicken menu items and espresso-based drinks have been boosting sales for several quarters. The espresso drinks are being added to the menu at all the company's U.S. locations — a process that is expected to be completed later this year. Analysts have said the new drinks could make the fast-food chain a big player in the specialty coffee sector once ruled by Starbucks Corp., which has been closing stores and cutting jobs.
In the first quarter, global same-store sales, or sales at locations open at least a year, rose 4.3 percent. Same-store sales jumped in every area of the world, rising 4.7 percent in the U.S. where the recession has dampened sales growth at most sit-down restaurants.
McDonald's said the stronger dollar hurt results by 8 cents per share and it had a gain of 4 cents per share from the sale of its minority interest in Redbox Automated Retail LLC. The company's last non-McDonald's venture, Redbox rents DVDs for $1 a night from vending machines.
McDonald's Chief Executive Jim Skinner said in a statement that the company's strong sales are likely to persist, adding that April same-store sales so far are looking "at least as strong or better than first-quarter sales in every area of the world."