McDonald’s Outperforms Sales Expectations Thanks to Affordable Menu and Exciting New Offerings

McDonald’s (NYSE:MCD) exceeded Wall Street’s third-quarter profit and sales expectations on Monday. This achievement was driven by increased demand for its more affordable burgers and fries, which appealed to customers dealing with persistently high food prices. Additionally, the company’s success was boosted by new menu launches.

Despite the industry-wide price hikes last year, McDonald’s managed to maintain its meal affordability, counteracting the trend of consumers affected by inflation choosing to eat more at home, resulting in reduced foot traffic. Global comparable sales at McDonald’s surged by 8.8% during the quarter ending on September 30, surpassing the analysts’ average forecast of a 7.36% increase, according to LSEG data.

Leveraging its history of menu innovations, McDonald’s introduced the Cheesy Jalapeno Bacon quarter pounder in July and reintroduced the popular Spicy Chicken McNuggets to its menu in September. Both of these additions likely contributed significantly to the strong sales growth experienced in the third quarter, as noted by UBS analysts.

Although overall dining traffic declined during all three months of the quarter, McDonald’s saw a 7.3% increase in July, according to Placer.ai data. Foot traffic weakened slightly in the following two months, with declines of 1.1% and 3.7%, but remained ahead of broader industry trends.

Comparable sales in the United States rose by 8.1% during the quarter, surpassing estimates of a 7.4% increase, partly due to higher average spending at its stores. Meanwhile, same-store sales in McDonald’s international markets increased by 8.3%, slightly exceeding expectations for 8.03% growth.

The company’s total quarterly revenue surged by 14% to reach $6.69 billion, surpassing estimates of $6.58 billion. Net income also increased, reaching $2.32 billion, or $3.17 per share, compared to $1.98 billion, or $2.68 per share, in the previous year. On an adjusted basis, McDonald’s reported a per-share profit of $3.19, comfortably beating estimates of $3.00.


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