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Oct, 25 2017

Global fast food chain McDonald sales rises 6%

Total revenue beat forecasts but overall was down 10.4 percent at $5.75 billion due to a step up in franchising of its restaurants

McDonald, world largest fast food chain has been working to reverse lower traffic at its U.S restaurants where it gets most of its profit under pressure from chains like Chipotle Maxican Grill and Panera Bread.  An overhaul in the past year has introduced fresh beef Quarter Pounders, Premium customizable sandwiches such as Signature Sriracha sandwich as well as online ordering and delivery.

Company's quarterly results showed global comparable sales rose 6 percent, beating the 4.5 percent increase expected by analysts.

McDonald's Chief Financial Officer Kevin Ozan said “the company had completed refranchising of 4,000 restaurants in China and Hong Kong more than a year ahead of schedule. Aggressive value promotions in the United States included offering soft drinks of all sizes for $1, McCafe beverages such as smoothies and espresso drinks for $2, and the McPick 2 offer, which lets customers buy two menu items for $5.”

Global Data Retail's Managing Director Neil Saunders said "Given that the fast food and casual dining segments as a whole struggled over the third quarter, this is an encouraging set of results which suggests McDonald's is gaining both market and customer share.

The changes, part of a turnaround plan under Chief Executive Steve Easterbrook, come after Chipotle and other chains raised the bar on what ordinary consumers can expect from mass market fast-food outlets.

McDonald's U.S. restaurants that have been open for at least 13 months rose 4.1 percent in the quarter ended Sept. 30, above the 3.4 percent growth expected on average by analysts polled by research firm Consensus Metrix.

According to Thomson Reuters, Excluding items, McDonald's earned a profit of $1.76 per share, only just missing an average analyst estimate of $1.77 per share.

Total revenue beat forecasts but overall was down 10.4 percent at $5.75 billion due to a step up in franchising of its restaurants which provides the company with less revenue but saves on costs. Analysts were expecting revenue of $5.74 billion.

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