McDonald's sales beat estimates as turnaround gathers pace
Oct 21 2016 by Johnny Bowman
McDonald's on Friday reported third-quarter sales that beat analysts' estimates amid concern that the boost from all-day breakfast was fading.
The world's largest fast-food chain reported net income of $1.28 billion, or $1.50 per share, compared with $1.31 billion, or $1.40 per share, a year earlier. In the first quarter, McDonald's US same-store sales rose 5.4%. Operating income in the United States rose 8% reflecting improved restaurant profitability and higher gains from refranchising.
But sales at McDonald's all-important USA business continued to slow amid people choosing to eat at home due to falling grocery store prices and stepped up promotions by other fast-food concepts.
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Revenue was $6.42 billion in the period ended September 30, the Oak Brook, Illinois-based company said in a statement on Friday. However, earnings per share rose to $1.50 from $1.40 in the year-ago period on lower weighted average shares outstanding in the latest quarter.
Comparable sales are considered a key indicator of a restaurant's performance, since they measure only the yearly change in sales for locations open at least 12 months. The segment's operating income rose 8% (10% in constant currencies) driven by improved restaurant profitability in China, which benefited from recent Value-Added Tax reform.
Looking ahead, we are focused on growing global comparable sales and serving more customers while being mindful of the near-term challenges in several markets. Analysts had projected $1.48 in per-share earnings. This supplemental information is provided to help investors understand the impact of the current and prior year charges on the Company's results.