Americans love coffee drinks, upscale burgers and hot deals on food — and McDonald’s parlayed all three into a successful third quarter.
McDonald’s turned its McPick 2 deal — two items for $5 — drink promotions and the expanding Signature Crafted gourmet burger and chicken sandwiches menu into the drivers behind a big increase in profits compared to last year ago.
“Momentum continued to build in the third quarter… We serve more customers more often,” said CEO Steve Easterbrook. “Our U.S. business has regained its stride.”
During a conference call with analysts, Easterbook said McDonald’s is joining rival chains in growing its delivery business. McDonald’s currently offers delivery at 3,700 restaurants in the U.S. via Uber Eats and plans to expand to another 1,300 by the end of the year.
McDonald’s reported net income of $1.88 billion, or $2.32 a share, up 48% compared to $1.28 billion, or $1.50 per share, in the same quarter last year. The sunny report allayed fears that recent extreme weather in Texas and Florida would dampen its performance.
Sales at U.S. restaurants open at least 13 months increased 4.1%, the company reported Tuesday. Globally, sales rose 6% in the quarter ended Sept. 30.
McDonald’s is now partnering with UberEats so you can get your favorite fast food items delivered. There’s also a chance to win free McDonald’s-themed clothing.
Third-quarter revenues were down 10%, though: $5.75 billion compared to $6.42 billion in the same quarter last year. McDonald’s said that’s because it sold off a chunk of its Asian business — approximately 2,800 restaurants in China and Hong Kong. As a result, the Oak Brook-Ill.-based chain can no longer count those stores’ sales as its own. Instead, it will collect licensing fees and rent.
Still, McDonald’s beat Wall Street revenue expectations of $5.7 billion.
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Some of the same beverage offerings touted as a reason for the chain’s strong performance this quarter are also causing headaches for individual restaurants. A new survey of franchisees by Nomura Instinet analyst Mark Kalinowski uncovered complaints about how the new hand-crafted McCafe caramel macchiato, Americano and cappuccino drinks take too long to make and slow down the drive-thru.
The McCafe brand was refreshed in September.
“Some technology and menu renovation is really starting to drive results and not just in the U.S.,” said Brian Yarbrough, an equity analyst with the brokerage firm Edward Jones. “For a company this big and this mature, for them to be growing (sales) that much, it’s pretty impressive.”
McDonald’s stock closed Tuesday at $163.88, up 54 cents or 0.3%.
Follow USA TODAY reporter Zlati Meyer on Twitter: @ZlatiMeyer
McDonald’s cashes in on gourmet burgers, coffee and food deals – USA TODAY