By Savyata Mishra and Waylon Cunningham Feb 11 (Reuters) – McDonald's topped Wall Street estimates for fourth-quarter global comparable sales and profit on Wednesday, as meal deals and strong marketing promotions pulled in budget-strapped U.S. diners and demand held firm in Australia and Britain. Global same-store sales at the burger giant rose 5.7% in the three months ended December 31, outpacing analysts' average estimate of a 3.7% increase, according to data compiled by LSEG. CEO Chris Kempczinski said on an earnings call that there was growing evidence that the Chicago-based company's value strategy was working, with gains in low-income customer visits. McDonald's last year began subsidizing franchisees' "extra value" meals but those subsidies are tapering off. "We don't subsidize pricing on a permanent basis," Kempczinski said. GRINCH MEAL CREATES HISTORY In December, McDonald's added a holiday-themed Grinch meal as part of its promotions. The meal notched "the highest single sales day in history," executives said. The company brought back its Monopoly tie-in after nearly a decade in October, followed by a slate of value offers as low as $5 in November. "MCD has to continue to grind away with marketing and value promotions that keep traffic positive and growing," said Jim Sanderson, analyst at Northcoast Research. Comparable sales in the U.S., McDonald's largest market, rose 6.8% in the October to December period, marking the biggest jump in about two years, compared with a 1.4% dip a year earlier, when an E. coli outbreak dented demand. Analysts were estimating a 4.9% rise. CHEAPER OPTIONS A HIT McDonald's has posted rising sales when many restaurant operators are struggling to retain traffic as consumers have tightened their belts. Cheaper options have fared better than the rest. Taco Bell same-store sales rose 7% in the latest quarter and KFC sales grew 3%, parent company Yum Brands said last week. Meanwhile, sales at the higher-priced Chipotle Mexican Grill declined 1.7%, the company reported earlier in February. STRONG INTERNATIONAL DEMAND Sales in McDonald's business segment, where restaurants are operated by local partners, jumped 4.5%, led by Japan, while international market sales rose 5.2%, driven by demand in Britain, Germany and Australia. Franchisee outlook on store performance for the next six months was the highest it has been in nearly three years, according to independent analyst Mark Kalinowski's franchisee survey from January. McDonald's earned $3.12 per share on an adjusted basis in the fourth quarter, topping expectations of $3.05. Revenue rose 10% to $7.01 billion. The company expects capital expenditure of $3.7 billion to $3.9 billion in 2026, mostly on new units, and plans to open about 2,600 restaurants globally. It forecast operating margin to be in the mid-to-high 40% range for the year, compared to 46.1% in 2025. "Global cost inflation remains a headwind that will pressure margin expansion without consistent traffic growth that drives operating leverage across the P&L," Sanderson said. Shares of the company were marginally lower in trading after the bell. BEVERAGE BET GROWS McDonald's is pushing deeper into the fast-growing and lucrative beverage segment, targeting cold coffees, crafted sodas and energy-style drinks to boost visits, particularly by younger consumers. The burger chain plans to roll out a new McCafe‑branded drink lineup in the U.S. and select international markets this year, building on a 500-store test that exceeded expectations, executives said on the call. (Reporting by Savyata Mishra in Bengaluru and Waylon Cunningham in New York; Editing by Sriraj Kalluvila)
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