McDonald’s Reports Excellent Second Quarter Results

Last week, McDonald’s reported that its second quarter delivered its best key sale metric results in the last five years. And, as to be expected, this news shot shares up—roughly 3 percent—in premarket trading.

Overall, though, global comparable sales for the quarter ending in June increased more than 6.5 percent on the year. Most importantly, this nearly doubled Wall Street’s 3.7 percent growth estimate. As such, net income rose 36 percent, to reach $1.70 per share on $6.05 billion in sales. This also beat what analysts forecast, though by a smaller margin: $1.62 per share on $5.96 billion in sales.

But the world’s biggest fast food burger chain has quite indefinitely defied an even bigger, gloomier outlook. Shares of the chain’s US restaurant business are up 25 percent this year, alone, on the heels of improving performance. In terms of same-store sales, the company also posted stronger results than analysts had originally expected. This metric increased nearly 4 percent in the quarter.

Under Steve Easterbook, the company has been looking to more efficiently adapt to changing consumer tastes and to more effectively transition to healthier options and pricing strategies. For one, the company has replaced its traditionally frozen patties to fresh been; at least, in some of the burger recipes.

Easterbook notes: “We’re building a better McDonald’s and more customers are noticing,”McDonald’s president and CEO Steve Easterbrook said in a statement Tuesday morning. “For the quarter, we delivered our strongest global comparable sales and guest count results in more than five years.”

Easterbrook also concluded by noting that his team is focused on continued improvement even as outlooks are already improving. “Today,” he says, “we’re acting like a leadership brand, taking on new challenges and opportunities and moving with a greater sense of purpose and I’m confident that we’re on the right path to continue positively impacting sales, guest traffic and customer satisfaction as we work to bring the biggest benefit to the most people in the shortest possible time.”

 

The company is touting a few simple changes that have likely contributed to its surprising quarter. First, the company says the $1 soft drink and $2 small McCafe promotions have impacted the numbers. Secondly, the “signature crafted sandwich” initiative—which pairs ingredients like pico de gallo with guacamole or chicken with ranch dressing—have helped to improve sales.

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