High Dollar Exchange Rate Hits McDonald’s Revenues, but Profit Rises 35 Percent Due to Increased Sales

According to a report released on Friday, McDonald’s net profit reached $1.1 billion in the last quarter, compared to $811 million a year earlier.

McDonald’s revenues fell by 1 percent year-on-year in the last quarter due to the high dollar exchange rate, but thanks to increased sales in the U.S., the profit of the world’s largest fast-food restaurant chain rose by 35 percent.

According to a report released on Friday, McDonald’s net profit reached $1.1 billion in the last quarter, while a year earlier it was $811 million.

Revenues amounted to $5.9 billion, down 1 percent year-on-year, primarily due to the high dollar exchange rate, which causes revenues of American companies from foreign markets to decline. However, the 1 percent revenue drop is the smallest in the last seven quarters.

Moreover, excluding the impact of the dollar exchange rate, revenues actually increased by 3 percent.

In U.S. restaurants open for at least 13 months, sales of the chain rose by 5.4 percent in the last quarter compared to the same period last year.

This growth is attributed to the company’s new offering – all-day breakfast – and price reductions, which have intensified competition with rivals such as Burger King, Dunkin’ Donuts…

By the third quarter of 2015, McDonald’s sales in the U.S. had been continuously declining for two years due to missteps by former CEO Don Thompson, who left the company in February last year.

The new head of McDonald’s Steve Easterbrook has managed to increase sales both in the U.S. and globally. In restaurants open for at least 13 months, global sales rose by 6.2 percent in the last quarter, the highest in the last three quarters.

McDonald’s also announced that it reduced operational costs by 10 percent year-on-year in the last quarter. This is attributed to the closure of unprofitable restaurants, the sale of restaurants to independent operators, and a reduction in managerial positions.