McDonald’s Corp. sales and profits beat expectations in the third quarter thanks to higher prices and movie-inspired ads touting the ubiquity of its burgers.
Comparable sales — which track restaurants open for at least 13 months — rose 8.8% in the period, surpassing the 7.8% average estimate of analysts polled by Bloomberg, according to financial results released by McDonald’s on Monday. The company’s earnings, excluding some items, were $3.19 a share, also beating estimates.
In the US, higher prices resulted in bigger check sizes, McDonald’s said. Marketing campaigns, expanding delivery and digital channels and better-run restaurants also helped. Yet sales increased at their slowest rate so far this year, with executives warning in July that the overall pace of growth would moderate as high inflation and interest rates take a toll on the economy.
“The macroeconomic environment is unfolding in line with our expectations for the year,” Chief Executive Officer Chris Kempczinski said in a statement. “We remain confident in our future and the strategic direction of our business.”
Comparable sales in international markets where the company directly owns and operates restaurants increased 8.3%, just missing the average estimate and decelerating from the prior year. Licensed foreign markets also expanded at a slower clip than the same period in 2022, though faster than analysts expected, as all regions posted strong results.
McDonald’s said restructuring costs hurt earnings by about 2 cents a share, or $26 million, before taxes. Earlier this year, the company announced a reorganization that included the dismissal of hundreds of employees as it sought to cut costs and accelerate decision-making.
McDonald’s shares rose 2.1% in Monday premarket trading in New York. Shares were down 3% this year through Oct. 27’s market close, while the S&P 500 index rose 7.2% for the same period.
Author: Daniela Sirtori-Cortina
