McDonald’s posted relatively healthy returns in the third quarter, egged on by the continued popularity of its all-day breakfast and new chicken nuggets without added preservatives.
McDonald’s beat analysts’ expectations across the board, posting revenues of $6.42bn with an earnings of $1.50 a share. Analysts had expected $6.28bn in revenue and $1.48 in earnings a share.
Global sales were up by 3.5%, more than double the 1.5% analysts had forecast.
“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,” the chief executive officer, Steve Easterbrook, said on Monday.
The growth was largely attributed to a 3.3% growth outside of the US, which accounts for two-thirds of McDonald’s business. Domestically, earnings went up by only 1.3% – still above expectations but held back by “industry softness”, the company said.
The UK in particular provided a bright spot for McDonald’s. The company has enjoyed 42 consecutive quarters of growth in Easterbrook’s home country.
Easterbrook highlighted the lack of tourism in France due to fears of terrorist attacks, combined with weak GDP and high unemployment, as a difficulty with growth in that market. Protests in China around the South China Sea also cut into sales.
Japan, however, witnessed a 17% growth in comparable sales and was one of the main drivers of the company’s strong global revenues.
Weak performances by companies such as McDonald’s have raised fears about the underlying health of the US economy. McDonald’s had previously failed to meet the revenue expectations of its all-day breakfast following its launch last year. However, returns in the previous quarter calmed some of those concerns.
“[All-day breakfast] is here to stay, it’s doing well for us and it’s a foundational element,” Easterbrook said in a conference call with investors and analysts.
The McPick 2, which allows customers to select two items from its McPick menu for $5, also continued to help sales. Easterbrook said that customers responded well to the new offering of chicken nuggets with no added preservatives, which saw a 10% sales growth in the last three months.
British-born Easterbrook took over McDonald’s last year, when it was experiencing difficulties in several markets around the world.
McDonald’s stock was up 2.89% to $113.76 after the earnings were announced.
