Has all-day breakfast proved to be the sales-slump cure McDonald's has been looking for? The world's largest fast food burger chain revealed its earnings for the fourth quarter of 2015 this morning, and the results were better than expected. For the second quarter in a row, U.S. sales are up, following a two-year streak of steady declines for the McRib creator.
Same-store sales rose 5.7 percent in the fourth quarter — compared to the 2.6 percent that analysts expected — and while the company largely attributes that to the October launch of all-day breakfast, they admit there's another more natural force at play here too: the "unseasonably mild weather" that many parts of the U.S. have been experiencing. (Perhaps sitting in a drive-thru line seems more appealing when you can't see your breath inside the car.)
Following this morning's earnings news, McDonald's stock opened at $122, an all-time high:
As the Associated Press notes, it's the biggest sales jump the company has experienced since 2012 — but many, including business reporter Candice Choi — believe the burger giant still has "a tough climb" ahead. Case in point: The number of people that actually patronized McDonald's was down 3 percent last year. This will be a telling year for McDonald's.
Heading into 2016, CEO Steve Easterbrook has laid out a trajectory in the hopes of winning back customers: The chain recently unveiled a new value menu, is making some efforts to simplify its bloated menu, and is giving its stores and its packaging a visual re-do intended to bring it firmly into the 21st century. But as customers wander off in search of higher-quality food, can all-day breakfast, dirt-cheap mozzarella sticks, and fancier decor continue to propel sales upward — or will the novelty of Egg McMuffins available around the clock wear off?
Speaking of turnaround plans: Things are certainly looking brighter for McDonald's right now then they are for poor Chipotle, which experienced a same-store sales drop of a whopping 30 percent in December.