McDonald’s Says Higher Prices Aren’t Scaring Off Diners as Sales Climb

McDonald’s Corp. said higher menu prices and rising orders for its burgers and other menu staples helped boost sales in its latest quarter.

The burger giant reported $5.9 billion in sales for the three months ended March 31, exceeding the expectations of analysts polled by FactSet. Quarterly revenue increased 4% from the prior-year period and 8% when accounting for the effects of currency fluctuations, the company said.

Chicago-based McDonald’s reported net income of $1.8 billion for the first quarter, up 63% from the same period last year. Earnings per share were $2.45 when adjusting for one-time items, ahead of analysts’ expectations of $2.33 a share.

McDonald’s Chief Executive Chris Kempczinski said the chain’s efforts to improve restaurant operations were paying off, and customer satisfaction has improved. The broader operating environment remains challenging, he said.

McDonald’s stock this month has traded at record highs. Its shares closed at $293.20 Monday, and have climbed 11% so far this year.

U.S. consumers’ spending at restaurants has held up better than their spending on big-ticket items, federal retail figures show. Investors are watching for signs that diners might be scaling back restaurant visits as companies begin reporting first-quarter earnings this month.

McDonald’s is in the midst of a broad restructuring, laying off hundreds of workers and reducing some employees’ compensation packages, The Wall Street Journal reported earlier this month. The company is also closing 10 U.S. offices that service restaurants, with remaining employees working virtually.

Company executives said they are seeking to make the company nimbler and more efficient. Mr. Kempczinski said in a January interview that there was no set head count or dollar amount he was looking to cut.

On Tuesday, McDonald’s said it incurred a $180 million pretax charge during the quarter, related to its corporate restructuring. Employee severance payments and lease-agreement expenses for the closure of the U.S. field offices contributed to the charge, the company said.

McDonald’s is also navigating tensions with its U.S. restaurant owners. Some are pushing back on the chain’s moves to tighten franchise standards and seeking to be more closely consulted on such changes.

McDonald’s said global same-store sales increased 12.6% for the first quarter compared with the same period last year. U.S. same-store sales also increased 12.6% from a year earlier. McDonald’s said the number of customers visiting its U.S. restaurants increased during the quarter.