McDonald’s earnings beat as Covid restrictions ease, fueling strong international sales
McDonald’s on Wednesday reported quarterly earnings and revenue that topped analysts’ estimates as its international sales bounced back, despite Covid-19 resurgences in some markets.
In its home market, the nationwide launch of its loyalty program lifted digital sales, and larger order sizes and menu price increases led to higher average check.
Shares of the company rose 3% in premarket trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
Earnings per share: $2.76 adjusted vs. $2.46 expectedRevenue: $6.2 billion vs. $6.04 billion expected
The company reported fiscal third-quarter net income of $2.15 billion, or $2.86 per share, up from $1.76 billion, or $2.35 per share, a year earlier.
Excluding strategic gains, McDonald’s earned $2.76 cents per share, beating the $2.46 per share expected by analysts surveyed by Refinitiv.
Net sales rose 14% to $6.2 billion, topping expectations of $6.04 billion. Worldwide, same-store sales climbed 12.7% from a year ago and 10.2% on a two-year basis.
In McDonald’s home market, same-store sales increased by 9.6% from a year earlier, when the fast-food giant started to see demand bounce back. On a two-year basis, same-store sales rose 14.6%. The chain credited its new chicken sandwich, a famous orders promotion with rapper Saweetie and other menu and marketing promotions for its strong performance.
McDonald’s recovery is outpacing that of many of its rivals, including Restaurant Brands International’s Burger King. On Monday, the burger chain reported its U.S. same-store sales shrank by 1.6% in the third quarter after the chain began transitioning away from paper coupons and value meals. Burger King’s global same-store sales climbed 7.9% after falling 7% a year earlier.
McDonald’s international operated markets segment saw its same-store sales rise 13.9% from a year ago, fueled by strong demand in the United Kingdom. The division also saw positive same-store sales in Canada, France and Germany as restrictions eased. However, Australia’s same-store sales were dampened by another round of lockdowns in some regions. On a two-year basis, the segment’s same-store sales climbed 8.9%.
The company’s international developmental licensed markets division reported 16.7% same-store sales growth. While China’s same-store sales shrank during the quarter due to spikes of Covid-19, Japan and Latin America reported strong sales. On a two-year basis, same-store sales rose 4.9%.