Shareholders lovin' it as McDonald's profits from smoothies

McDonald's stock soars to a record high after more stellar results. All hail the Golden Arches...

by Elizabeth Anderson
Last Updated: 14 Mar 2016
In case you hadn't noticed, this isn't the easiest time to be a consumer business. And yet McDonald's seems to go from strength to strength: announcing its third-quarter results today, the world’s biggest fast food chain said sales were up 4% to $6.3bn in the three months to September 30, thanks in no small part to strong sales of its fruit smoothies and other healthy snacks. McDonalds may not be everyone's cup of skinny soy latte. But it's hard not to admire its ability to flourish in any market conditions...

For a chain that made its name from greasy burgers - and saw its reputation savaged in 'Supersize Me' - McDonalds has done a pretty good job of re-inventing itself over the last few years. It may have been a latecomer to the 'healthy eating' party, but it's making up for lost time: it has introduced salads and fruit onto its menu, and in New Zealand its chicken nuggets now even carry the Weight Watchers logo. This drive by McDonald’s will continue for at least another year, apparently: there are plans in the pipeline to add oatmeal to the breakfast menu from 2011 (which may not taste as good as a sausage and egg McMuffin, but is much less calorific).

But it's not just been about healthy eating. Particularly in Europe, McDonalds has been working hard to modernise and update its stores, even extending its open hours. It's also cashed in well on trends like coffee and smoothies, while catering for the cash-strapped diner with cheaper options like the 99p menu. This helped boost European sales by about 4% last quarter, while for the group as a whole, profits were up 10% to £883m. So it's continuing to outperform its rivals, despite the economic uncertainty on both sides of the pond.

Of course, McDonalds hasn't convinced everyone: critics argue that its high-calorie menu still includes supersize portions, and that much of its food still has high fat and salt levels. And it's true that whatever McDonalds may say about trying to generate more awareness of healthy eating, it is still serving Big Macs and double cheeseburgers at the same time.

On the other hand, these numbers suggest that the punters still want them - and thanks to its low-cost options, it's also true that McDonalds remains an affordable way for the masses to eat out. At the end of the day, it is a hamburger joint - but at least now there are choices for those people without a predilection for saturated fat and salt. What's more, judging by its recent sales, it's been able to continue its rebranding process while still serving up super-size profits. No wonder shareholders are lovin' it - today's news sent the stock soaring towards $80, a new record...

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