Page last updated at 14:15 GMT, Wednesday, 22 April 2009 15:15 UK

Strong sales boost for McDonald's

McDonalds branch in Chicago
Price conscious consumers are eating at McDonald's during the recession

McDonald's has announced slightly higher profits in the first three months of the year as people look for value meals during the recession.

Profits at the the US fast-food giant, the world's largest hamburger chain, rose 4% to $979.5m (£676m) from $946.1m in the same period last year.

The company also said that sales so far in April were strong.

Last month, McDonald's warned that the strong dollar and high commodity prices would squeeze first quarter revenues.

Sales up

McDonald's' sales have increased in the economic downturn, helped by its low prices and the ubiquity of its fast-food outlets.

Global sales grew by 4.3%, with those in the US up by 4.7%, those in Europe increasing by 3.2% and those in Asia, the Middle East and Africa climbing by 5.5%.

This improvement was despite there being one less trading day in the period compared with last year, which was a leap year, and Easter falling outside the quarter this year, the company said.

But despite the rise in sales, total revenue fell by 10% from a year earlier, from $5.61bn to $5.08bn.

Without the strengthening dollar, performance would have been stronger, the chain said.

"Our underlying business performance remains strong... despite the economic concerns around the world. Our well-known value proposition and unparalleled convenience continue to resonate with customers," said Jim Skinner, McDonald's chief executive.

"In fact, the momentum has continued with April comparable sales trending at least as strong or better than first quarter sales in every area of the world," he added.

'Meeting expectations'

Analysts said the results were roughly in line with forecasts, unlike many previous quarters when McDonald's exceeded them.

"They're holding the line, they're meeting their expectations," said Matthew DiFrisco, restaurant analyst at investment bank Oppenheimer.

"It was a company, though, that was exceeding expectations through much of the last two years, so it will be interesting to see how the market reacts to an in-line quarter," he added.

McDonald's shares were almost unchanged in early trading in New York.

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