McDonald’s posts positive third quarter results

Global fast food chain, McDonald’s, has posted an increase in sales for the third quarter as its promotions and fresh food offerings attract more customers.

McDonald’s net income rose to $1.88 billion (A$2.42 billion) in the three months ending September 30 from $1.28 billion the previous corresponding period.

Total revenue was $5.75 billion, down 10 per cent from a year earlier due to charges related to a refranchising initiative, according to McDonald’s.

The fast-food company said on Tuesday that sales in the US rose 4.1 per cent at existing locations during the third quarter, thanks to its US$1 drinks and its two for US$5 promotion called McPick 2.

McDonald’s also said pricier burgers, which are stuffed with crispy onions, kale or guacamole, helped boost sales, too.

McDonald’s has been working to modernise its restaurants by adding mobile ordering and offering delivery through the UberEats app. It’s also been tinkering with its menu as more people shun processed foods: It removed artificial preservatives from its nuggets and it’s working to use fresh beef in its Quarter Pounder burgers.

“We’re building a better McDonald’s and more customers are noticing,” said chief executive Steve Easterbrook.

Adjusted earnings came to $US1.76 per share, a penny above what analysts expected, according to Zacks Investment Research.

Revenue fell 10 per cent to US$5.75 billion, missing analyst expectations of US$5.8 billion. The company said it brought in less revenue as it switches more stores from company-owned restaurants to ones owned by franchisees, especially in China and Hong Kong.

Neil Saunders, managing director of GlobalData Retail, although various storms and natural disasters across the US threatened to blow McDonald’s off course, the company’s third-quarter numbers are a testament to both its resilience and the soundness of its reinvention strategy.

He said international growth may have waned slightly in lead markets, but its US comparable sales growth continues to accelerate over the same period last year.

“Given that the fast food and casual dining segments as a whole struggled over the third quarter, this is an encouraging set of results which suggests McDonald’s is gaining both market and customer share,” Saunders said.