McDonald's Corp. ended a year of improving results with a ninth straight month of strong U.S. sales and said its fourth-quarter earnings will be in line with Wall Street's expectations.
Comparable sales, measuring the performance of restaurants open more than a year, rose 7.3 percent in December on the strength of a 12.2 percent increase in U.S. outlets, the hamburger chain said Thursday. European sales increased by a modest 2.3 percent.
The monthly results appear to confirm what McDonald's said in the wake of the disclosure of the first U.S. case of mad cow disease: The scare has had no impact on sales. That news emerged on Dec. 23, however.
Chief executive Jim Cantalupo, who took over the then-struggling chain a year ago, said the 2003 results show that efforts to strengthen service, food quality, menu variety and marketing are showing dividends.
"The comparable sales increases achieved by each of our geographic segments indicate that our actions are beginning to pay off," he said. "We still have much to do, but it is encouraging to end the year with such strong sales and profit momentum."
McDonald's recent sales gains are attributed in part to the success of its new entree-sized salads, McGriddles breakfast sandwiches and white meat chicken nuggets along with its high-powered global marketing campaign, with the tag line "I'm lovin' it."
The company said quarterly earnings will amount to about 10 cents per share because of the decision announced last month to slim down its portfolio of partner brands, including selling Donatos Pizzeria back to its founder and discontinuing development of all non-McDonald's brands outside the United States. That will take 25 cents per share off results.
But excluding those charges, the Oak Brook, Ill.-based company's guidance is in line with the forecast of Wall Street analysts surveyed by Thomson First Call, who estimated earnings of 35 cents a share. McDonald's reports earnings on Jan. 26.
Fourth-quarter earnings also will mark a distinct improvement over a year earlier, when McDonald's posted the first quarterly net loss in its history _ a $343.8 million deficit reflecting an assortment of charges and write-offs aimed at helping it pull out of a deep slump. Those changes helped spur the company's gains in 2003.
McDonald's shares were down 1 cent to $25.06 in morning trading on the New York Stock Exchange.