McDonald's Earnings Top Expectations

By Anne Steele 

McDonald's Corp. reported better-than-expected earnings and solid growth in same-restaurant sales for the September quarter, helped in part by the continued popularity of its all-day breakfast and the introduction of new chicken nuggets.

Shares in the company, down 13% over the past three months, added 3.5% to $114.41 in premarket trading.

Sales at existing restaurants rose 3.5% in the period, handily beating the consensus estimate of 1.5% growth in a survey of analysts by Consensus Metrix. In the U.S., comparable sales increased 1.3%, just above the 1.2% growth anticipated by analysts. All-day breakfast and the introduction of chicken nuggets with no artificial preservatives helped power domestic sales, despite "continued industry softness."

International sales, meanwhile, grew 3.3%, beating analysts' views of 1.8%. Overseas sales were led by a "strong performance in Japan," McDonald's said.

Since taking the helm last March, Chief Executive Steve Easterbrook has moved to bolster the company's sales by paring down its menu, offering more transparency about how its food is made and launching all-day breakfast at many of its domestic restaurants. That move initially fueled stronger growth and higher traffic, but impact has since dwindled.

In all for the September quarter, McDonald's reported a profit of $1.28 billion, down from $1.31 billion a year earlier. Per-share earnings rose a dime to $1.50, boosted by a lower share count. Foreign currency shaved 3 cents off the bottom line on a per-share basis. Analysts had projected $1.48 in per-share earnings.

Revenue slipped 2.9% to $6.42 billion. Analysts were looking for $6.28 billion.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

October 21, 2016 08:39 ET (12:39 GMT)

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