McDonald's profits get a boost from coffee

McDonald's has unveiled higher revenues and profits for the first quarter of 2011, as customers opted for cheaper coffee and breakfast items.

Despite a tough economy on the high street, the fast-food giant unveiled a 9pc rise in profit before income taxes to $1.7bn (£1bn). Revenues rose 9pc to $6.1bn.

Jim Skinner, chief executive, said: "Our dedication to building the McDonald's business by optimizing our menu, modernizing the restaurant experience and broadening accessibility continues to drive our global performance.

"For the quarter, McDonald's delivered double-digit earnings per share growth led by higher comparable sales and guest counts across all geographic segments and strong franchise margin performance."

The restaurant chain has been aided by cash-strapped customers shunning higher-priced coffee outlets such as Starbucks in favour of cheaper places to have their breakfast. In its announcement, McDonald's - which said it has an "ongoing emphasis on everyday affordability" - stated that "key contributors to the quarter were beverages, including the McCafe line-up and the new Fruit & Maple Oatmeal" in the US.

Meanwhile, in Europe strong comparable sales in the UK, France, Russia and Germany drove double-digit operating income growth of 12pc. Australia and China fuelled growth Asia/Pacific, Middle East and Africa.

Like other fast food burger chains, McDonald's has had to contend with rising beef costs that have eaten into profits, as well as a growing desire for healthier food.

Mr Skinner added: "Despite the challenges of the current economic environment, I am confident that McDonald's can continue to grow by listening to our customers and remaining true to our proven Plan to Win strategy."

From: The Telegraph.co.uk