- Better sales and earnings send shares higher
- Strong demand from cash-strapped consumers
- New products and digital sales boost growth
Shares in fast-food giant McDonald’s (MCD) were trading up 3% ahead of the market open after the firm bested Wall Street sales and profit estimates for the third quarter, making it seven beats in the last eight quarters.
The firm said strong demand for its relatively cheap burgers and fries hit the spot for diners struggling with high food prices.
Global comparable sales increased 8.8% compared with the 7.4% growth expected by analysts, according to LSEG data. Group revenue jumped 14% to $6.7 billion, slightly ahead of Street estimates of $6.6 billion despite a strong US dollar.
The company reported diluted EPS (earnings per share) up 19% to $3.19 in the quarter to 30 September, around 7% higher than consensus estimates.
WHAT DID THE CEO SAY?
Chief executive Chris Kempczinski commented: ‘With global systemwide sales growth of 11%, our third quarter results reflect our position of strength as the industry leader.
‘The macroeconomic environment is unfolding in line with our expectations for the year, and we continued to deliver convenience and value for our customers.’
Analysts at UBS said new launches drove ‘solid’ sales growth in the quarter.
McDonald’s launched the Cheesy Jalapeno Bacon quarter-pounder in July and brought back the popular Spicy Chicken McNuggets to menus in September.
In the US, the firm launched its ‘As Featured In Meal’ campaign which features meals that have appeared in movies and TV shows.
The company continues to see growth across digital channels with sales in its six biggest markets increasing to $9 billion from $8 billion in the prior quarter.
If the pre-market gains are maintained when trading begins on Monday, it will reduce share price losses to 1% for the year to date.
