McDonald's US same-store sales advance 4.1%
Oct. 24, 2017
by Erica Shaffer
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Revenues decline 10 percent as the company works to refranchise company owned stores.
OAK BROOK, Ill. – McDonald’s Corp. reported a 6 percent gain in global comparable sales for the third quarter ended Sept. 30, while revenues slid 10 percent on the company’s efforts to refranchise company owned restaurants.
In the United States, comparable sales for the third quarter advanced 4.1 percent on the strength of the company’s national beverage and McPick 2 value promotions. The success of the Signature Crafted premium sandwich platform also provided tailwinds.
Comparable sales for the International Lead segment increased 5.7 percent, led by strong performances in the United Kingdom and Canada.
China spurred positive results in the High Growth segments, which reported third quarter comparable sales increase of 6.2 percent.
In the Foundational markets, comparable sales jumped 10.2 percent on positive sales performance across all geographic regions, McDonald’s said.
“We are serving more customers, more often by offering great tasting food at a good value with the quick service and friendly hospitality they expect from McDonald’s," said Steve Easterbrook, McDonald’s president and CEO. “Our positive comparable sales and guest counts across all of our operating segments during the third quarter demonstrate broad-based momentum throughout our business that builds upon our strong first half of 2017.”
Net income for the quarter was $1,883.7 million, or $2.32 per diluted share, an increase of 48 percent compared with $1,275.4 million, or $1.50 per diluted share reported in the third quarter of 2016.
Third-quarter revenues declined 10 percent to $5,754.6 million from $6,424.1 million reported in the year-ago period.
“During the quarter, we refranchised our businesses in China and Hong Kong, reaching our target to refranchise 4,000 restaurants more than a year ahead of schedule," said Kevin Ozan, McDonald’s CFO. “Completing this transaction brings us closer to the customers and communities we serve in these markets and creates a better opportunity to unlock their full growth potential. Our more heavily franchised structure will continue to drive shareholder value by providing a more stable revenue and income stream with higher returns on invested capital.”
For the nine months ended Sept. 30, McDonald’s reported net income of $4,493.6 million, up 29 percent compared with $3,493.1 million reported a year-ago. Revenues for the latest quarter were $17,480.2 million, down 6 percent from $18,593.0 million reported for the comparable year-ago period.
“We’ve made progress in many areas of our business already, including optimizing our restaurant ownership mix and running better restaurants,” Easterbrook said. “At the same time, we also are making strides with initiatives such as delivery, mobile order and pay, as well as the Experience of the Future transformation of our restaurants that will make the experience more convenient, personalized and enjoyable for our customers.”