CEO Chris Kempczinski highlighted the U.S. improvement as the quarter progressed following the company’s value-focused initiatives.
- The company reported adjusted EPS of $3.57, beating estimates, while revenue rose 1% year-over-year to $7.16 billion, missing expectations, according to Fiscal.ai.
- U.S. comparable sales fell 0.2%, missing analysts’ expectations for a 0.1% decline and marking McDonald’s first decline after five consecutive quarters of growth, according to Reuters.
- However, comparable sales rose 1.4% in international-operated markets and 4.2% in international developmental-licensed markets, with Germany and Australia leading growth in operated markets, partly offset by weakness in France.
McDonald’s (MCD) shares were in focus on Wednesday after the company reported third-quarter results that beat adjusted earnings expectations but missed revenue estimates, while U.S. comparable sales remained slightly lower.
CEO Chris Kempczinski said, “In the U.S., we’re encouraged by improvement as the quarter progressed following our intervention on value.”
MCD shares traded 3% higher at the time of writing.
Adjusted Earnings Beat Estimates, Revenue Falls Short
McDonald’s reported adjusted earnings of $3.57 per share for the third quarter, up from $3.22 per share a year earlier, beating analysts’ expectations of $3.38 per share, according to Fiscal.ai.
However, revenue increased 1% year-over-year to $7.16 billion, slightly below the estimated $7.28 billion, according to Fiscal.ai. Net income rose to $2.49 billion from $2.28 billion a year earlier.
Global comparable sales increased 1.5% year-over-year, compared with 3.6% growth in the same quarter last year.
US Comparable Sales Decline As International Markets Grow
U.S. comparable sales fell 0.2% in the third quarter, slightly worse than analysts’ expectations for a 0.1% decline, according to data cited by Reuters. This marked McDonald’s first decline in U.S. comparable sales after five consecutive quarters of growth, the Reuters report added.
Meanwhile, International results provided some support, with comparable sales rising 1.4% in international-operated markets and 4.2% in international developmental-licensed markets. McDonald’s said growth in operated markets was led by Germany and Australia, partly offset by weakness in France.
The company said negative comparable guest counts in the U.S. were largely offset by growth in average spending per visit.
McDonald’s global systemwide sales increased 4% to more than $38 billion in the third quarter, while adjusted operating income increased 8%. The company also said that its systemwide sales to loyalty members across 70 markets exceeded $11 billion during the quarter, bringing the total to $41 billion over the trailing 12 months.
How Retail Views MCD
On Stocktwits, retail sentiment around the stock remained ‘bearish’ amid ‘normal’ message volumes in the past 24 hours. MCD was also one of the trending tickers on the platform at the time of writing.
MCD shares have dropped over 15% year-to-date.
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