McDonald’s plans major expansion

THE world’s largest fast-food chain McDonald’s expects to add 450 new restaurants this year, chief financial officer Matthew Paull said yesterday.

The company also plans to add 100 Chipotle Mexican Grill restaurants, and will open about 850 McDonald’s restaurants, closing 400.

McDonald’s posted fourth-quarter net income of $125.7 million after new menu offerings such as white-meat Chicken McNuggets spurred the biggest sales gain in more than eight years.

The company, based in Oak Brook, Illinois, said yesterday it plans to boost capital spending this year to as much as $1.6bn, from about $1.3bn last year, as it refurbishes some of its 30,000 restaurants and opens new stores.

Shares in McDonald’s rose 21 cents to $25.49 in midday trade in New York. They gained 54% last year. Net income of 10 cents a share compares with a loss in the same quarter last year, the company’s first ever, of $343.8m, or 27 cents.

Revenue surged 17% to $4.56bn from $3.9bn.

McDonald’s has posted a profit in four-straight quarters under chief executive James Cantalupo, who was brought out of retirement a year ago. He introduced Chicken McNuggets with all-white meat in November to capitalise on the public’s desire for healthier fare.

New foods and revamped marketing with the ‘I’m Lovin’ It’ theme helped boost total sales at their fastest pace since 1995.

“The strategy, which has worked so far, has been about cleaning house and really understanding the business,’ said Sarat Sethi, a portfolio manager at Douglas C Lane & Associates.