McDonald’s Initiatives in U.S. Help Global Sales Top Expectations
McDonald’s Corp posted its largest rise in sales at same-restaurants worldwide in the past five years, driven by more traffic and successes in its U.S. initiatives that included promotions on beverages and the launching of its signature crafted sandwiches.
Now two years into its turnaround under CEO Steve Easterbrook, the burger chain giant is attempting to reverse the drop in traffic at its restaurants in the U.S., its largest profit generator, by several different measures, including the preparation of its quarter pounders using free beef and its signature crafted higher end sandwiches.
The behemoth in fast food has sold its soft drinks of all size for only $1 since April and launched an offer for a limited time of McCafe beverages, which includes smoothies, frappes as well as espresso drinks for just $2.
Both of the measures helped traffic and spending to increase at McDonald’s, with the launch of the craft sandwiches persuading some of the customers who stopped visiting to return and to draw in new McDonald’s patrons, said an industry analyst on Wall Street.
Global sales for same-restaurants was up over 6.5% helped by the biggest increase in traffic in restaurants for over five years and beating the 4% growth rate estimated by Wall Street.
Sales at restaurants in the U.S. opened a minimum of 13 months were up 3.9% during the recently ended second quarter, beating the increase of 3.2% estimated by Wall Street.
Strong quarterly sales across China boosted the company’s comparable sales in the high growth segment of McDonald’s to 7%, nearly double the 3.6% estimated by Wall Street analysts.
This came as a contrast to the sluggish results in China from Yum Brands the operator of Pizza Hut, Taco Bell, and KFC.
Net incomes was up ending at $1.40 billion equal to $1.70 a share for the quarter ending June 30, compared to $1.09 billion equal to $1.25 a share for the same period one year ago at McDonald’s.
Excluding certain items, profit at McDonald’s was $1.73 a share, which beat the estimates on Wall Street of $1.62.
Revenue was down 3.4% ending the quarter at just over $6.05 billion that also beat expectations on Wall Street of just over $5.95 billion.
Shares of McDonald’s were 2.7% higher during premarket trading on Tuesday to just over $156 per share.
The fast food industry has struggled to keep up with the quickly changing eating habits of consumers, and with these latest financials it appears McDonald’s is succeeding.
Get Analysts' Upgrades and Downgrades Daily - Enter your email address below to receive a concise daily summary of analysts' upgrades, downgrades and new coverage with MarketBeat.com's FREE daily email newsletter.