In an aerial view, a sign is posted in front of a McDonald’s restaurant on April 03, 2023 in San Pablo, California.
Justin Sullivan | Getty Images
McDonald’s on Thursday reported quarterly earnings and revenue that topped analysts’ expectations as its China sales rebound and mascot Grimace drives U.S. visits.
“This quarter, if I’m being honest, the theme was Grimace,” CEO Chris Kempczinski said on the company’s conference call.
Shares of the company were up nearly 2% in midday trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $3.17 adjusted vs. $2.79 expected
- Revenue: $6.5 billion vs. $6.27 billion expected
The fast-food giant reported second-quarter net income of $2.31 billion, or $3.15 per share, up from $1.19 billion, or $1.60 per share, a year earlier.
The company spent $18 million during the quarter on its corporate restructuring, which included layoffs and buyouts for some employees in April.
Excluding those charges and other items, McDonald’s earned $3.17 per share.
Net sales rose 14% to $6.5 billion.
The company’s global same-store sales climbed 11.7%, topping StreetAccount estimates of 9.2%. All three of McDonald’s divisions reported double-digit growth for same-store sales.
In the U.S., its largest market, same-store sales climbed 10.3%. McDonald’s also reported that visits to its U.S. locations grew for the fourth consecutive quarter.
Children eating hamburgers, french fries, and chicken nuggets from McDonald’s.
Mark Peterson | Corbis Historical | Getty Images
The company attributed some of those visits to its marketing efforts, like its Grimace Birthday Meal, released in the last weeks of the quarter. The meal combo, which included a photo-friendly purple milkshake, went viral on social media, fueled by nostalgia for the McDonaldland character.
Executives also noted consumers’ desire for value as inflation puts pressure on their wallets and dampens consumer sentiment. Kempczinski said the chain is performing well with consumers who make less than $100,000, and with those who make under $45,000.
“What we’re seeing with [consumers who make less than $45,000] is we are seeing a little bit of a decrease in order size but it’s being offset by very strong or continued strength in traffic,” he said.
McDonald’s international operated markets reported same-store sales growth of 11.9%. The company said the United Kingdom and Germany drove the division’s strong performance. However, unrest in France weakened the company’s sales there.
“We’ve also had a number of restaurants that have actually been impacted through some of the protests there that we’ve had to take offline and they’re going to need to go and get rebuilt,” Kempczinski said.
McDonald’s international developmental licensed markets saw 14% same-store sales growth, fueled by higher demand in China, where the economy is still bouncing back from prolonged Covid lockdowns.
The company’s new business ventures team is also in the process of launching a spinoff brand called CosMc’s, Kempczinski said. The new brand will be a small-format restaurant with “all the DNA of McDonald’s but its own unique personality.”
The company plans to share more on the venture at its investor day in December.
Read the full earnings report here.