McDonald’s global sales top estimates as affordable meal options boost demand
[CHICAGO] McDonald’s global comparable sales beat Wall Street expectations for second quarter, as affordable meal bundles and promotions drew in budget-conscious diners looking to stretch their US dollars amid persistent economic uncertainty.
Strong demand in the US and international markets powered a 3.8 per cent rise in global same-store sales, above expectations of a 2.4 per cent rise, according to data compiled by LSEG.
Shares of the Chicago, Illinois-based company rose about 3 per cent in premarket trading.
Fast-food chains have seen competition heat up as companies such as McDonald’s, Domino’s Pizza and Taco Bell owner Yum Brands double down on value meals to counter a slowdown in demand, mainly among the lower-income households.
To improve sales, McDonald’s launched a limited-time Happy Meal offer for kids and adults tied to the “Minecraft” Movie promotion in April. In May, it introduced McCrispy Chicken Strips as a permanent menu item.
These promotions are in addition to the US$5 meal deal and the buy-one, add-one for US$1 offers launched last year.
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Menu innovation and promotions had also helped Domino’s report upbeat US same-store sales, while weakening demand hurt sales at Yum Brands and Chipotle Mexican Grill.
For the second quarter, McDonald’s outperformed the wider quick-service restaurant category, with visits rising 0.8 per cent from a year ago and compared to a 0.7 per cent dip in the QSR space, data from foot traffic tracking firm Placer.ai showed.
The launch of Snack Wraps on July 10 boosted visits to US stores at the start of the third quarter, Placer.ai analyst RJ Hottovy said.
Comparable sales in US, McDonald’s biggest market, grew 2.5 per cent, compared with a 0.7 per cent decline a year ago.
Sales in its business segment where restaurants are operated by local partners, jumped 5.6 per cent, led by Japan, while international markets sales rose 4 per cent, owing to a demand recovery in the UK, Canada and France.
Adjusted net income came in at US$2.29 billion, or US$3.19 per share, up 7 per cent from a year ago. REUTERS
