CHICAGO – Higher average check from changes in product mix and menu price increases lifted McDonald’s Corp. comparable sales 2.4 percent in the third quarter of fiscal 2018.
“In addition to achieving 13 consecutive quarters of positive global comparable sales, we have made substantial progress modernizing restaurants around the world, enhancing hospitality and elevating the experience for the millions of customers we serve every day,” McDonald’s President and CEO Steve Easterbrook said. “We remain confident that our strategy will drive long-term, profitable growth.”
In the company’s International Lead segment, comparable sales jumped 5.4 percent reflecting positive results across all markets driven by the United Kingdom, Australia and France.
For the third quarter ended Sept. 30, McDonald’s reported revenues declined 7 percent to $5,369.4 million, compared with $5,754.6 million reported in the third quarter of 2017. Operating income in the segment was flat during the quarter.
Third quarter comparable sales increased 4.6 percent in the High Growth segment led by strong performance in Italy and the Netherlands. Prior-year operating income included a gain of approximately $850 million related to the sale of the company’s businesses in China and Hong Kong, partly offset by unrelated impairment charges. Excluding these items, the segment's operating income decreased 5 percent, or 1 percent in constant currencies, due to the impact of refranchising.
Operating income for the quarter declined 21 percent to $2,417.7 million compared with $3,079.4 million reported in the year-ago period. Revenues for nine months slipped 9 percent to $15,862.2 million compared with $17,480.2 million in the nine months of 2017. Operating income slipped 8 percent to $6,823.1 million from $7,408.5 million reported a year ago.
In the company’s Foundational markets, third quarter comparable sales advanced 6 percent on positive sales performance in Japan and across all geographic regions. Operating income climbed 6 percent, or 12 percent in constant currencies, on sales-driven improvements in franchised margin dollars.
Net income for the third quarter totaled $1,637.3 million, or $2.10 per diluted share, down from $1,8883.7 million reported in the third quarter of 2017. The company said results for the quarter and nine months 2017 reflected a pre-tax gain of approximately $850 million on the sale of McDonald’s businesses in China and Hong Kong, partly offset by $111 million of unrelated impairment charges, for a net benefit of $0.56 and $0.52 per share, respectively.
The company reported net income of $4,509 million, or $5.72 per diluted share for the nine months ended Sept. 30, compared with $4,493.6 million, or $5.48 per diluted share reported in the year-ago period. Results for the nine months 2018 included pre-tax strategic restructuring charges of $94 million, or $0.09 per share. The company said $85 million of that amount was related to the restructuring of the US business.
Excluding those items, net income for the quarter increased 14 percent, or 17 percent in constant currencies, while diluted earnings per share increased 19 percent, or 22 percent in constant currencies.
For the nine months ended Sept. 30, net income increased 13 percent, or 11 percent in constant currencies. Diluted earnings per share increased 17 percent, or 15 percent in constant currencies.