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McDonald's (NYSE:MCD) released its second-quarter results on July 26 before market opened. The company posted strong earnings and revenue for the quarter meeting analysts' estimates.
By the numbers
The fast food chain registered second-quarter earnings per share of $2.05, which lived up to Wall Street's estimates of $2.05. Quarterly revenue was $5.34 billion, topping expectations of $5.33 billion. Barring the impact of currency, revenue soared 3% year on year. Despite beating estimates, the company's refranchising program hurt its revenue a bit.
Global comps growth in the reported quarter was 6.5%, which surpassed Wall Street's growth estimate of 5.1%. The company attributed robust global comps to strong comps across all its segments.
Reflecting on the quarter's performance, company's president and CEO Steve Easterbrook said:
"With the strong results we achieved in the second quarter, we have now experienced 16 quarters of positive global comparable sales. By putting our customers at the centre of all our efforts to run great restaurants, enhance the customer expiereince and provide delicious menu offerings, we will continue to successfully execute our Velocity Growth plan"
Segment details
In the U.S., same-store sales rose 5.7% in the second quarter courtesy of scintillating countrywide and local deal offerings that included the "2 for $5 Mix and Match" deal. Operating income rose 5% year-on-year on account of comparison with a charge associated with strategic restructuring that occurred last year. Barring the charge, operating income plunged 3%.
Comps at International Operated division grew 6.6% in the reported quarter driven by robust sales performance across all markets especially U.S., France and Germany. On the flip side, segment's operating income dropped 3% as McDonald's undertook sales driven improvements in franchised margin dollars.
At the International Developmental Licensed Segment, comps inched up 7.9% compared with the prior quarter's comps growth of 6%. The sales improvement for the second quarter is attributable to strong performance in all geographical regions.
Looking ahead
Earlier this month, the company announced that it would partner DoorDash as a delivery partner thereby intensifying its McDelivery service in the U.S.
The fast-food chain plans to invest nearly $1 billion in fiscal 2019 to revamp U.S. stores by introducing self-order Kiosks and other improvements, hoping that these measures will help the company expiereince the same success that it saw in its overseas markets through tech-focussed modernization. The primary aim is to enhance customer experience and traffic.