McDonald's reports small increase in Q3 global, US sales

by MEAT+POULTRY Staff
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OAK BROOK, Ill. – McDonald’s Corp. reported a 3.5 percent increase in global comparable sales in the third quarter of fiscal 2016 and a 1.3 percent increase in US comparable sales. The chain’s All Day Breakfast, McPick 2 platform and the introduction of chicken McNuggets with no artificial preservatives supported the increase in the company’s sales.

“Customers today are more informed and demand greater choice and variety when they dine out. That’s why we’re evolving the McDonald’s experience to provide more high quality, affordable food and beverage options and convenient solutions for customers on the go,” said McDonald's President and CEO Steve Easterbrook. “Our third quarter results, including our fifth consecutive quarter of positive comparable sales across all segments as well as improved restaurant profitability, are a testament to the progress we are making to satisfy the needs of today’s dynamic customers.”

For the third quarter ended Sept. 30, McDonald’s reported net income of $1.275 billion, or $1.50 per diluted share, compared to $1.309 billion, or $1.40 per diluted share, reported in the year-ago quarter. The net income for the nine months ended Sept. 30 was $3.493 billion compared to $3.323 billion the same period the year prior, a 5 percent increase.

Total revenues for the quarter declined to $6.424 billion from $6.615 billion in September 2015.

Operating income in the US rose 8 percent on improved restaurant profitability and higher gains from refranchising. “McDonald’s US begins the fourth quarter with an expanded All Day Breakfast menu and continued emphasis on food quality and the customer experience,” the company said.

In the International segment, comparable sales increased 3.3 percent for the quarter, led by strong performance in the UK, Australia, Canada and Germany. Third quarter operating income for the segment increased 2 percent fueled by sales-driven improvements in franchised margin dollars across most markets, the company said.

According to company reports, McDonald’s saw negative comparable sales in China in the third quarter due in part to temporary protests related to events surrounding the South China Sea and in comparison to strong results the prior year. The segment’s operating income rose 8 percent due in part to improved restaurant profitability in China, which benefited from recent VAT reform.

“We are putting the customer at the center of everything we do and are directing our resources towards those innovations and investments that will strengthen our ability to deliver a better McDonald’s experience over time. Our customers, system, and shareholders are best served when we direct our focus and energy towards executing against these critical customer expectations,” Easterbrook said. “Looking ahead, we are focused on growing global comparable sales and serving more customers while being mindful of the near-term challenges in several markets. We remain committed to driving long-term, profitable results while pursuing our goal of being recognized by our customers as a modern, progressive burger company.”

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