McDonald’s Corp. reported second-quarter sales and profits that surpassed analysts’ projections, a sign that it’s still attracting diners despite tighter household budgets and higher menu prices.
(Bloomberg) — McDonald’s Corp. reported second-quarter sales and profits that surpassed analysts’ projections, a sign that it’s still attracting diners despite tighter household budgets and higher menu prices.
The key metric of comparable-store sales rose 11.7% in the quarter, besting the 9.4% average estimate compiled by Bloomberg. In the US, McDonald’s benefited from “strategic menu price increases” and an advance in guest counts. Earnings of $3.17 a share, excluding some items, also exceeded expectations.
Comparable sales in international markets also beat estimates, led by growth in the UK, Germany and China.
“While global macroeconomic challenges persist, we continue to invest in our growth,” Chief Executive Officer Chris Kempczinski said in a statement accompanying the company’s results.
The shares rose 2.5% during early trading in New York. McDonald’s shares have gained almost 11% in 2023 through Wednesday’s close, lagging behind the S&P 500 Index’s 19% advance.
McDonald’s results point to the appeal of the chain’s offerings during economic uncertainty, even as the company charges more for its burgers and fries. Its delivery service in the US also grew, even though it’s more expensive than in-person dining and customers at other chains have pulled back.
In contrast with McDonald’s, fast-casual chain Chipotle Mexican Grill Inc. on Wednesday missed analysts’ estimates for same-store sales and revenue.
The Chicago-based burger chain also touted “culturally relevant brand and marketing campaigns” as growth drivers. In June, a promotion including a purple shake celebrating the birthday of McDonald’s character Grimace took the internet by storm.
McDonald’s said restructuring costs hurt earnings by 2 cents a share, or $18 million, before taxes. The company earlier this year announced a revamp that included the dismissal of hundreds of employees in a bid to reduce costs and accelerate decision-making, while also cutting the pay packages of some corporate staff.
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