Excluding currency translation, revenues advanced 7% for the quarter. The S&P is down 3% for the same period. Mr. Easterbrook said the chain is seeing a few seconds shaved off of drive-thru service times with simplified menu boards, an important area as about 70% of the USA business is handled in those drive-thru lanes.
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In the first significant sign that Chief Executive Steve Easterbook’s turnaround plan is starting to work, McDonald’s sales jumped more than 8 per cent to a record $110.88 in early trading.
The company has also implemented strategies to improve order accuracy, Easterbrook said.
But Easterbrook said he expects McDonald’s Q4 comp sales to be positive in all segments. This month, it started offering breakfast items all day in the U.S.-its biggest operational change in years, trumpeted with a marketing and social-media blitz.
Same-store sales increases in the company’s overseas markets also exceeded expectations, with China showing a strong rebound from a supplier problem that hampered sales past year. The remaining 100 countries constitute the Foundational Markets, which also showed positive growth. His predecessor Don Thompson’s turnaround attempts laid the groundwork for the changes, which include a leaner global corporate structure, a spruced up brand image and a tighter menu mix, all created to transform McDonald’s into a “modern, progressive” burger company. Up 0.9%, the company attributed the third quarter growth to the new Premium Buttermilk Crispy Chicken Deluxe sandwich and a return to “classic recipe ingredients” in the Egg McMuffin.
The Chinese supply scandal of 2014 seems far behind McDonald’s now and has led to a less volatile sales platform. “It’s been a successful rollout”, he said, adding that it has been smoother operationally than “people had feared”.
One analyst asked about whether the “Summer Lovin'” promotion worked (Easterbrook said it bumped into too many local discount initiatives initially but gained traction). In a note to investors, Mr. Kalinowski said one idea franchisees are considering is allowing customers to pick two menu items for $2. Analysts had projected net income of $1.27 per share, according to Thomson Reuters, compared with $1.09 reported a year earlier. Restaurants in the United Kingdom, Canada and Australia also saw growth.
“We continue to believe all-day breakfast will prove to be a meaningful driver of comp growth in 4Q – with an initial sales lift upwards of four percentage points and a sustained lift of two percentage points”, the note said.
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After years of losing customers to trendy rivals like Chipotle and Shake Shack, McDonald’s is trying to reinvent itself.
