McDonald’s reported better-than-expected quarterly same-restaurant sales, helped by the launch of all-day breakfasts in the United States and recovering demand in China.
Sales at U.S. restaurants open at least 13 months rose 5.7 percent, handily beating the average estimate of 2.7 percent.
McDonald’s introduced all-day breakfasts in its U.S. restaurants in October, in a bid to attract more diners in the face of growing competition from rivals such as Chipotle Mexican Grill and Shake Shack.
“As we enter 2016, we expect continued positive top-line momentum across all segments,” said Chief Executive Officer Steve Easterbrook, who took the helm last year.
The company does not break out China sales but said sales in its “high growth” markets, which include Russia and China, rose 3 percent.
The company’s net income rose to $1.21 billion, or $1.31 per share, in the fourth quarter ended Dec. 31, from $1.1 billion, or $1.13 per share, a year earlier.
Analysts on average had expected earnings of $1.23 per share, according to Thomson Reuters I/B/E/S.
Revenue fell 3.5 percent to $6.34 billion, mainly due to a strong dollar, but beat the average analyst estimate of $6.22 billion.
Shares of McDonald’s rose more than 3 percent in premarket trading immediately following the announcement. (Get the latest quote here.)
Wall Street had upped the ante for the quick-service brand, which has revamped its image following several years of market share declines. October’s third-quarter-earnings beat sent McDonald’s shares to an all-time high, boosting the Dow by 47 points.
Monday’s report is the first to reflect changes like all-day breakfast, which rolled out in early October. Since then, several analysts have upgraded the company.
“Our channel checks suggest that in the short term, McDonald’s has regained at least some of its mojo,” wrote Nomura analyst Mark Kalinowski, when upgrading the stock this month. BTIG analyst Peter Saleh also wrote on Jan. 19 that he now has a “buy” rating on the stock
If McDonald’s achieves a 3.5 percent same-store sales for its domestic business in the fourth quarter, it would mark the best showing in the last 14 quarters, Kalinowski said. He is expecting changes like expanded breakfast, mac-and-cheese or even sweet potato fries to help flesh out menus at McDonald’s in the coming year.
The megachain serves 69 million customers daily with restaurants in 119 countries, according to data from its November investors meeting.
— CNBC’s Katie Little and Reuters contributed to this report.