McDonald’s earnings beat as Covid restrictions ease, fueling strong international sales : Rashtra News
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.
On the heels of its strong performance, McDonald’s raised its forecast for systemwide sales growth for full-year 2021.
Shares of the company rose more than 2% 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 expected
- Revenue: $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.
Since the launch of its U.S. loyalty program in early July, the company has enrolled over 21 million members, with 15 million active users. For comparison, Chipotle Mexican Grill launched its loyalty program in 2019 and counted 24.5 million customers as members at the end of its latest quarter.
In October, the chain is seeing same-store sales growth in the low single-digits on a two-year basis. CFO Kevin Ozan said the company expects similar results for the rest of the fourth quarter.
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%.
For the rest of fiscal 2021, McDonald’s is predicting systemwide sales growth in the high teens, excluding currency fluctuations. It previously forecast growth in the mid-to-high teens.
Read the full earnings release here.
( News Source :Except for the headline, this story has not been edited by Rashtra News staff and is published from a www.cnbc.com feed.)
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