McDonald's beats expectations for profit, sales
Fast-food giant McDonald's edged third-quarter expectations for profit and revenue as the company seeks to solidify gains from its all-day breakfast push.
The third-quarter earnings performance proved heartening to investors, who drove McDonald's shares (MCD) up 2.5% to $113.39 in early trading.
Revenue fell 2.9% to $6.42 billion for the quarter, compared to a year earlier, beating S&P Global Market Intelligence expectations of $6.28 billion.
Net income fell 2.6% to $1.28 billion but edged expectations of $1.26 billion. On a per share basis, diluted earnings were $1.50.
Sales at stores open at least a year throughout the world rose 3.5%, with U.S. stores posting a 1.3% gain.
McDonald's to add McGriddles to all-day breakfast menu this fall
The company attributed the improvements to its new all-day breakfast push, which is expanding with additional items, as well as a new value-oriented deal called McPick 2 and Chicken McNuggets with no artificial preservatives.
"We are putting the customer at the center of everything we do and are directing our resources towards those innovations and investments that will strengthen our ability to deliver a better McDonald's experience over time," McDonald's CEO Steve Easterbrook said in a statement. "Looking ahead, we are focused on growing global comparable sales and serving more customers while being mindful of the near-term challenges in several markets."
The gains came despite a sluggish global economy and lower grocery prices in the U.S., which have incentivized some diners to eat at home.
Dan Burrows, an analyst with InvestorPlace.com said same store sales growth in Japan and Brazil "stood out in terms of strength. The U.S. was softer, but that’s a problem for the restaurant industry in general. The big test is how they do in the current quarter. McDonalds introduced all-day breakfast in last year’s fourth quarter. It’s been a hit. So now they’re cycling against (a) difficult year-over-year comparison."
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.
Contributing: Charisse Jones