McDonald’s Corp.’s turnaround is showing signs of gaining steam, helped by all-day breakfast, “value deals” and lower commodity prices, even as labour costs and other headwinds exert pressure on them.

The fast-food chain posted a 6.2-per-cent gain in “same-store sales” last quarter, the best performance in four years. (Same-store sales show the performance of McDonald’s restaurants open at least 13 months.)

Earnings topped analysts’ estimates.

But company-wide revenues declined last quarter, the seventh straight drop.

The boost same-store sales seems to show CEO Steve Easterbrook’s plan to revive the world’s largest restaurant chain is gathering momentum.

The company has reignited U.S. sales with all-day breakfast and McPick two-for-$2 and two-for-$5 deals.

“They’re getting back to why customers fell in love with the brand,” said Michael Halen, an analyst at Bloomberg Intelligence.

Since taking the helm more than a year ago, Easterbrook has revamped drive-thru ordering, tweaked kitchen operations and slimmed down the menu.

The burger chain faces challenges. Higher labour costs are exerting pressure on its profit margins.

McDonald’s also is embroiled in a dispute with the National Labor Relations Board in the U.S. over whether workers at its franchised restaurants qualify as company employees, a change that threatens to upend its business model.

The company’s shares, which rose as much as 2.1 per cent early in the trading day, were little changed at $125.77 (U.S.) at 10:43 a.m. in New York amid a broader decline in U.S. stock markets. McDonald’s had gained 6.5 per cent this year through Thursday’s close, compared with a 2.3-per-cent advance for Standard & Poor’s 500 Index.

While revenue dropped 0.9 per cent to $5.9 billion in the quarter, that beat the average projection of analysts, $5.81 billion. Net income rose to $1.23 a share in the quarter, the Oak Brook, Illinois-based company said in a statement Friday. Analysts estimated $1.16, on average.

Profit is getting a boost from lower prices for ingredients, such as beef, and that trend may continue. The company said it expects its “grocery bill” of 10 commodities to drop by as much as 4.5 per cent in the U.S. this year, a larger decline than the company predicted in January.

McDonald’s, which gets about two-thirds of its revenue from international locations, is seeking to attract diners overseas with new food and deals in these locations. In Germany, the chain is advertising a low-priced basics menu, along with new double-chicken burgers topped with honey mustard.

In March, McDonald’s said it’s seeking partners in Asia to accelerate its plans to grow there. The purveyor of Big Macs plans to add more than 1,500 restaurants in China, Hong Kong and Korea in the next five years. The company also recently said it’s trying to find strategic partners for Taiwan and Japan.

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Same-store sales are considered a key indicator. Sales by that measure, as compiled by Consensus Metrix, increased 5.4 per cent in the U.S. Analysts projected a 4.6-per-cent gain. Same-store sales rose 5.2 per cent in McDonald’s international lead markets unit, which includes the U.K., Australia and Canada. Analysts estimated a 4.1-per-cent increase. Comparable sales increased 3.6 per cent in the high-growth markets. Analysts projected an advance of 3.4 per cent. Same-store sales rose 11 per cent in the foundational markets segment, as lifted by a rebound in Japan. Analysts estimated a 6.2-per-cent gain.

“Our turnaround is taking hold,” Easterbrook said in the statement. “The ongoing investments we’re making in running great restaurants and delivering what matters most to our customers are beginning to yield sustained positive results.”

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