McDonald’s on Monday reported quarterly earnings that topped analysts’ estimates, helped by promotions that drove U.S. customers to return to its restaurants.
Shares of the company rose 3.6% in premarket trading amid a broader market rally. McDonald’s is scheduled to hold an investor update after its quarterly conference call.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $2.22, adjusted vs. $1.90 expected
- Revenue: $5.42 billion vs. $5.4 billion expected
The fast-food giant reported fiscal third-quarter net income of $1.76 billion, or $2.35 per share, up from $1.61 billion, or $2.11 per share, a year earlier.
Excluding gains from the sale of its shares of McDonald’s Japan and other items, the company earned $2.22 cents per share, topping the $1.90 per share expected by analysts surveyed by Refinitiv.
Net sales dropped 2% to $5.42 billion, beating expectations of $5.4 billion.
The company’s global same-store sales fell 2.2% in the quarter, dragged down by slower recovery of its international markets. But the United States reported same-stores sales growth of 4.6%, fueled by a strong September that included its popular promotion with rapper Travis Scott and the launch of its limited-time spicy McNuggets.
McDonald’s said it expects to deal with restrictions in various markets as long the coronavirus pandemic continues. New restrictions, like mandatory dining room closures, have begun hitting some of its key international markets, like France, Germany, the United Kingdom and Canada in recent weeks.
The company will increase its quarterly cash dividend by 3% to $1.29 per share.
McDonald’s reiterated that it’s expecting to spend $1.6 billion on capital expenditures this year but added more detail on those investments in a regulatory filing Monday. About $850 million will go to its U.S. business, with half of that money being spent to upgrade about 900 restaurants. The company is forecasting about 950 new restaurant openings. About 270 of those new locations will be in the U.S. and International Operated Markets, which includes France and the United Kingdom. China is expected to add about 400 new locations this year.
In total, the company expects about 300 net new restaurants in 2020. McDonald’s previously announced it would close about 200 locations in the U.S. More than half of those locations are lower sales volume restaurants inside Walmart stores.