McDonald’s has reported mixed third-quarter results, with falling traffic at its US restaurants pushing domestic same-store sales into a slight decline, although the performance was better than analysts had expected.
Sales at US restaurants open for at least 13 months fell by 0.2%, compared with the 0.5% decline forecast by analysts. Shares rose by about 6% in afternoon trading.
Chief executive Chris Kempczinski said the company was encouraged by an improvement in the US business as the quarter progressed after changes to its value offering.
Chief financial officer Ian Borden said US same-store sales returned to growth in September after falling in July and August. However, he later clarified in response to an analyst’s question that he had not said domestic same-store sales would improve in the fourth quarter.
McDonald’s has increased its focus on discounts as consumers have become more cautious about spending. Its latest efforts have included promoting Extra Value Meals and restoring regional and national offers on its mobile app, which is particularly important to frequent customers.
The fast-food chain is also testing two new value menus in the US. One features mix-and-match bundles, while the other offers set combinations of menu items. Executives said the option that proves most popular with customers and franchisees will be introduced nationwide in early 2027.
For the quarter, McDonald’s reported adjusted earnings of 3.57 dollars per share, ahead of the 3.38 dollars expected by analysts. Revenue rose 1% to 7.16 billion dollars, below the 7.29 billion dollars forecast.
Net income increased to 2.49 billion dollars, or 3.51 dollars per share, from 2.28 billion dollars, or 3.18 dollars per share, a year earlier. Excluding restructuring charges and other items, earnings were 3.57 dollars per share.
Worldwide same-store sales rose 1.5%, exceeding the 1.3% expected, with the strongest performance coming from McDonald’s international operations.
The company’s international developmental licensed markets division, which includes Japan and China, reported same-store sales growth of 4.2%, well ahead of the 2.1% analysts had forecast.
Same-store sales in the international operated division, which includes Australia and Germany, rose 1.4%. That was below expectations of 2.1%.
“In the majority of our large international markets, we’re holding or gaining share,” Mr Borden said. “It’s a soft consumer environment, but we’re doing well.”
France was identified as a weak spot. Mr Kempczinski said franchisees there had recently voted on a strategy to turn around the business, which has been affected by a softer economy and short-term disruption linked to student protests.
