Shares surged to an all-time high Thursday, up 7 percent to $109.66 a share in early trading, as the company’s third-quarter profit and revenue topped Wall Street expectations.
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Third-quarter net income was up 23 percent to $1.31 billion, or $1.40 per share. Previous year during the same period, per share earnings for the Golden Arches were $1.09.
While McDonald’s was up on global comparable sales by 4%, they had a huge headwind in the year-over-year comparison due to a supplier issue in China last year.
The company also said it expects the sales figure to rise globally for the final three months of the year, including in the U.S.
McDonald’s said on Thursday that its global same-restaurant sales rose 4 percent in the third quarter.
“The return to positive same-store sales across all of the operating segments is a huge progress for their turnaround plan”, said Jennifer Bartashus, an analyst at Bloomberg Intelligence.
The United States, McDonald’s No. 1 market for profit, reported a surprise 0.9 percent increase in sales at restaurants open at least 13 months. 3Q revenue stood at $6.62 billion, higher than the consensus estimates of $6.41 billion.
Favourable sales results for McDonald’s in worldwide markets is good news for the Irish beef industry, since one in five burgers eaten in McDonald’s across Europe is made from Irish beef.
McDonalds has been introducing new menu items, testing all day breakfast and improving ingredients used in a few sandwiches.
Overall performance was particularly robust within the section that consists of China, led by way of a sales restoration within that country following a provider problem in the previous year.
McDonald’s is making a number of changes in the US that it hopes will set the stage for a turnaround.
In the US, Easterbrook rolled out the all-day breakfast, started switching to chickens that were raised without antibiotics and increased wages for its workers in restaurants operated by the company.
When it comes to technology in its stores, McDonald’s had been working to move a more tech-oriented experience into its restaurants under former CEO Don Thomson.
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“It suggest that the company’s key initiatives…are paying off”, Hottovy said. Franchisees remain in doubt about the company’s future. Comparable sales grew in the USA for the first time in two years. It’s too soon to declare Chief Executive Steve Easterbrook’s turnaround a success, but the business is stabilizing as the fast food giant grapples with changing consumer tastes.
