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McDonald’s Beats Sales Estimates Again

McDonald’s Beats Sales Estimates Again

(Bloomberg) -- McDonald’s Corp. surged the most in three years after the company reported global comparable sales that beat estimates, indicating the chain is winning ground in the fierce fight for fast-food market share.

  • Total same-store sales climbed 4.2 percent, even as McDonald’s home market slightly missed growth estimates.

Key Insights

  • McDonald’s, which gets nearly two-thirds of revenue from overseas, said comparable sales in its international lead markets division that includes Australia and the U.K. topped estimates, rising 5.4 percent. The high-growth segment, which includes China, also beat.
  • The company is remodeling restaurants across the globe with a modern look and more tech, such as self-order kiosks. “The changes McDonald’s is making are right and will pay dividends over time,” Neil Saunders, managing director of GlobalData Retail, said in an email. “Indeed, a failure to change would be disastrous.”
  • Its low-cost strategy continues to pay off as diners flock to discounts in a fast-food race to the bottom. Its large size with 37,000 locations gives it a commodity-buying advantage, meaning the chain and its franchisees can afford to lower prices more than competitors.
  • The recent push into delivery with Uber Eats also is helping sales domestically, though other rivals are starting to catch up on door-to-door service.
McDonald’s Beats Sales Estimates Again



Market Reaction

  • The shares rose as much as 6.7 percent to $177.87, the highest intraday level in nine months, amid declines in the broader stock market. The stock had dropped 3.2 percent this year through Monday’s close, compared with a 3.1 percent gain in the S&P 500 Index.
  • For more details on the earnings, click here.
McDonald’s Beats Sales Estimates Again

--With assistance from Vivian Li, Karen Lin and Iris Zambrowski.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Lisa Wolfson, Cecile Daurat

©2018 Bloomberg L.P.