McDonald’s quarterly profits boosted by store makeovers and new menus

McDonald’s, the world’s biggest burger chain, saw its profits rise 5 percent to $1.27 billion in the first quarter of 2012, thanks to revamped restaurants and growing demand for new menu items like chicken McBites and McCafe drinks.

Sales at US branches that opened their doors in the last 13 months rose 8.9 percent, while quarterly results showed strong sales growth of 5 percent in Europe led by the UK and Russia, soothing concerns that the downturn would impact negatively on custom there, the BBC reports.

Sales in Africa, the Middle East and Africa were up 5.5 percent. In a statement, McDonald’s CEO Jim Skinner said:

“McDonald's continued momentum in first quarter drove market share gains and profitability across all geographic segments. The ongoing strength of McDonald's results, amidst persistent economic headwinds, is a testament to our customer-focused plans and our proven business model.”

The results come as McDonald’s undergoes a major leadership transition. Last month Skinner announced that he would retire in June after 41 years at the firm, to be replaced by Don Thompson, who most recently served as the chain’s chief operating officer.

McDonald’s is facing aggressive competition from market rivals Wendy’s and Burger King, the Financial Times reports, and is planning to spend about $1.45 billion this year on giving 2,400 stores a makeover.

The company also aims to open 1,300 new stores in 2012, compared with 1,150 last year, Bloomberg reports. Shares in McDonald’s climbed 1.8 percent to $97 in New York at 9:37am. The company’s stock had declined 5 percent this year before today’s results were announced.