McDonald’s loving rise in first-quarter profits

NEW YORK (AP) — McDonald’s Corp., which has been thriving during the economic downturn, saw its first-quarter profit climb nearly 4 percent as more customers worldwide came to the Golden Arches for a cheap meal.

Sales of chicken, breakfast and beverages were particularly strong, McDonald’s said.

The nation’s No. 1 hamburger chain said it is capturing a bigger bite of the market in nearly every part of the world as consumers cut back on their spending and look for a less-expensive alternative to sit-down restaurants.

“They’re scaling back and being more discernible about what they purchase,” Chief Executive Jim Skinner said Wednesday on a conference call with investors.

New fried chicken menu items and espresso-based drinks have been boosting sales for several quarters. The espresso drinks are now on the menu at 10,000 of the company’s 14,000 U.S. restaurants and are expected to be at all of them this summer. Once the rollout is finished, Skinner said the company will begin a major ad campaign to promote the drinks.

Analysts have said the new espresso beverages could make the fast-food chain a big player in the specialty coffee sector once ruled by Starbucks Corp., which has been closing stores and cutting jobs.

Skinner also confirmed reports that the company will launch its hefty Angus Burger in all U.S. locations this year. The burger has been sold in several test markets but the company held back from introducing it to all U.S. consumers in favor of focusing on its core menu. The burger is slightly more expensive than McDonald’s other burgers.

Still, the company plans to continue advertising its value menu and less-expensive core menu items at the same time.

Barclays Capital analyst Jeffrey Bernstein called the company’s results “impressive in this environment” and said in a note to investors that McDonald’s will remain “the name investors return to in a ’flight to quality.’”