McDonald's quarterly sales growth, profit beat Wall Street estimates

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© Reuters. The McDonald's logo is seen outside the fast-food chain McDonald's in New York© Reuters. The McDonald’s logo is seen outside the fast-food chain McDonald’s in New York

(Reuters) – McDonald’s Corp (N:) on Wednesday reported quarterly comparable sales growth and profit above market expectations, as the world’s largest burger chain benefited from its revamped stores, new delivery partnerships and higher menu prices.

Over the past few years, McDonald’s has focused on improving dining experience by bringing technology to stores and shoring up delivery services, while also adding new burgers, beverages and breakfast foods to its menus to lure customers.

Chief Executive Officer Chris Kempczinski, who took charge in November after the company’s previous chief was dismissed, said the annual global comparable sales growth of 5.9% was the chain’s highest in more than 10 years.

As a part of its former CEO’s vision, the company began modernizing stores and even bought two smaller technology firms that focus on digitizing stores and drive-thru menus.

McDonald’s last year bought Dynamic Yield, a technology firm that specializes in helping companies personalize customer interactions, and Silicon Valley company Apprente that uses artificial intelligence to understand drive-thru orders.

For 2020, McDonald’s forecast a 5% to 7% rise in selling, general and administrative expenses as it continues to invest in technology, research and development.

Global comparable sales rose 5.9% in the fourth quarter ended Dec. 31, higher than the 5.23% growth expected by analysts, according to IBES data from Refinitiv.

Sales in U.S. restaurants open for more than 13 months rose 5.1%, slightly above the estimate of a 4.67% increase.

The company’s stock, a component of the blue-chip Dow Jones Industrial index (), rose about 1.5% to $213.50 in pre-market trading.

The stock gained 11.3% in 2019, lagging some of its rivals such as Chipotle (N:) and Starbucks (NASDAQ:) and the broader restaurants index <.SPLRCREST> that rose nearly 22% last year. McDonald’s shares are up 6.5% so far this year, outperforming the 0.7% increase in the Dow Jones Industrial Average Index ()

Excluding one-time items, the company earned $1.97 per share, a cent above Wall Street expectations.

Net income rose 14% to $2.08 per share. Revenue rose 3.6% to $5.35 billion, slightly above the estimate of $5.31 billion.

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