Global comp sales of McDonald's rise 4% in third quarter
The fast food chain saw an increase in global comparable sales in its network, including the first rise in US comparable sales in two years, according to its reported financial results ended September 30, 2015.
Global comparable sales rose 4.0%, reflecting positive comparable sales in all segments, while consolidated operating income decreased 2% (increase of 10% in constant currencies).
Diluted earnings per share was reported at $1.40, an increase of 28% (44% in constant currencies), due in part to a benefit from comparison to the prior year's increase in tax reserves related to certain foreign tax matters.
Consolidated revenues decreased 5%, though it saw an increase of 7% in constant currencies.
"Consumers have more choices than ever about where to dine, and our operational growth-led turnaround is focused on appealing to customers in the areas that matter most to them - great-tasting, high-quality food, convenience and value," said McDonald's President and Chief Executive Officer Steve Easterbrook.
"I am encouraged by our operating performance for the quarter, with positive comparable sales across all segments, including the U.S., as well as sales recovery in China following the prior year supplier issue. I am confident in the fundamental strength of the McDonald's System and our ability to drive initiatives that are focused on delivering the greatest benefit for our customers."
In the U.S., third quarter comparable sales increased 0.9%, the segment's first quarterly comparable sales increase in two years. U.S. third quarter operating income declined 1% due to incremental investment in wages and benefits for all eligible Company-operated restaurant employees, which is designed to improve restaurant performance and enhance our employer brand.
Comparable sales for the International Lead Markets segment increased 4.6% for the third quarter led by strong performance in Australia, the U.K. and Canada and positive results in Germany. Third quarter operating income decreased 11% (increased 5% in constant currencies). Positive consumer response to multiple menu, service and value initiatives throughout most of the segment contributed to the segment's performance.
In the High Growth Markets segment, third quarter comparable sales increased 8.9%, reflecting very strong comparable sales performance in China and positive performance in most other markets. Operating income increased 39% (68% in constant currencies). Emphasis on value and breakfast during the quarter contributed to China's sales recovery.
Easterbrook said, "Third quarter marked an important step in the Company's global turnaround - the reorganization of our business from a geographically focused structure to business segments that combine markets with similar characteristics and opportunities for growth. As we begin fourth quarter, comparable sales are expected to be positive in all segments. While still in the early stages, we believe our turnaround plan is starting to generate the change needed to reposition McDonald's as a modern, progressive burger company."
