McDonald’s Corporation (MCD) delivered a mixed bag of results for the third quarter, exceeding earnings and revenue expectations but facing a decline in global comparable sales. This led to a premarket dip in shares on Tuesday.
The fast-food giant reported adjusted earnings per share of $3.23, surpassing the analyst consensus estimate of $3.20. Quarterly sales came in at $6.90 billion, also exceeding the analyst consensus view of $6.82 billion. Revenue climbed 3% (2% in constant currencies) compared to the previous year. Company-owned and operated restaurants saw a 4% increase in sales, while franchised restaurants saw a 1% growth.
However, the company’s global comparable sales took a hit, falling by 1.5% during the quarter. The US market saw a modest 0.3% increase in comparable sales, but international operated markets experienced a 2.1% decline, with international developmental licensed markets showing a 3.5% decrease.
The decline in international markets was attributed to several factors, including negative sales in France and the UK, the ongoing conflict in the Middle East, and poor sales in China, which overshadowed positive sales in Latin America.
Despite the challenges, McDonald’s has been making progress in its digital strategy and loyalty program. Systemwide sales to loyalty members reached over $28 billion in the last twelve months and nearly $8 billion for the quarter.
In September, the company announced a 6% increase in its quarterly cash dividend, bringing it to $1.77 per share.
While the company did not mention any impact on guidance from the recent E.coli outbreak that affected locations in the Western US, it appears to be cautiously navigating the current market environment.
Despite exceeding earnings expectations, McDonald’s is facing headwinds from global economic uncertainty and market-specific challenges. It remains to be seen how these factors will impact the company’s performance in the coming quarters.
MCD shares were trading lower by 2.46% to $289.50 premarket at last check Tuesday.
