McDonald’s gains sales thanks to a reduced menu and a promotion for McNuggets

McDonald's gains sales thanks to a reduced menu and a promotion for McNuggets
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McDonald‘s (MCD.N) surpassed Wall Street forecasts for third-quarter sales and profit on Monday. The company was able to do so by introducing new products and continuing to attract customers who were having trouble paying for expensive food.

Premarket trading saw a 3% increase in the company’s shares, which also increased its quarterly cash dividend by 10%.

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Due in part to its size and scope, McDonald’s meals have remained relatively more affordable even after the industry-wide price increase last year, which has helped buck the trend of consumers who are affected by inflation dining more at home and a general reduction in foot traffic.

The burger behemoth, which has a history of improving its menu, introduced the Cheesy Jalapeno Bacon quarter-pounder in July and brought back the beloved Spicy Chicken McNuggets in September.

Joshua Long, an analyst at Stephens, said that McDonald’s has done a “fantastic job” of bringing back menu items that have done well over time in order to increase sales and profitability.

Long continued, “The Golden Arches remain resilient.”

Placer.ai data showed that although total eating traffic decreased over the quarter, there was a 7.3% increase at McDonald’s in July. In the following two months, McDonald’s foot traffic strength decreased but yet outpaced overall industry trends.

According to LSEG statistics, global comparable sales increased 8.8% in the quarter that ended on September 30, compared with analysts’ average prediction of a 7.36% increase.

For the remainder of the year, Long continued, “the value, the affordability, as well as the consistency that the McDonald’s brand can provide to the consumer” will further fuel sales momentum.

The business raised full-year margin forecasts to 46% from 45% earlier as a result of declining pricing for proteins and vegetables, which contributed to a 12% improvement in total restaurant margins to $3.84 billion in dollar terms.

Comparable sales in the United States increased by 8.1%, exceeding projections of a 7.4% growth, and same-store sales in its overseas operating markets also exceeded forecasts.

$3.19 in adjusted profit per share surpassed $3.00 in forecasts.

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