McDonald’s Turnaround A Healthy One

Gone are the days when McDonald’s (NYSE:MCD) was the butt of jokes. Sure, the company still sells unhealthy food of questionable quality, but its sales are no longer suffering because of it. Let’s take a look at the company’s Q4 report highlights to see how:

Revenue of $6.34 billion, was down 3.5% year over year, but beat analyst expectations by $120 million. Foreign exchange knocked off 9% of revenue.

Earnings per share came in at $1.31, beating the consensus.

Global comparable-store sales grew 5%.

Same-store sales in the U.S. took off, growing 5.7% over the quarter. There was also strength in Foundational markets (+5.9%), led by Asia and Europe; International Lead markets (+4.2%) led by the United Kingdom, Canada and Australia; and High Growth markets (+3%) led by Russia and China.

mcdonalds final checks

How it recovered in the U.S.

McDonald’s had a year-and-a-half string of tough months beginning in October 2013. During that time, the company recorded only negative same-store sales growth (there was one zero-growth month in the mix) in its home market.

Company management struggled to find a solution, throwing as much spaghetti at the wall as it could to see what stuck. For example, it announced it would begin to move away from using chickens that have been treated with antibiotics meant for human use.

The company also began testing kale in its menu. We saw it as nothing more than a short-sighted PR stunt to convince shareholders and customers that it was changing its ways health-wise. But some people did try the kale breakfast bowl and actually enjoyed it, including a writer from digital magazine TakePart, which describes itself as a social action platform for the conscious consumer. There’s no news yet whether McDonald’s will offer its kale dish on a widespread level.

What really got the U.S. going wasn’t a health-related, however. In October of last year, the company made its largest menu change in decades — it launched all-day breakfast.