TLDR
- McDonald’s global comparable sales jumped 3.8% in Q2, beating expectations of 2.5% growth
- US same-store sales increased 2.5%, reversing a 3.6% decline from the previous quarter
- Revenue hit $6.84 billion, surpassing analyst forecasts of $6.70 billion
- McCrispy Chicken Strips and Minecraft-themed meals drove customer traffic back to stores
- Stock price rose 3% following the earnings announcement
McDonald’s delivered a strong turnaround in its second quarter results, posting better-than-expected sales growth that ended a streak of declining performance. The fast-food chain reported global comparable sales growth of 3.8%, well above analyst expectations of 2.5%.
The company’s US same-store sales jumped 2.5% during the quarter, marking a sharp reversal from the 3.6% drop recorded in the first quarter. This performance exceeded analyst predictions of 2.3% growth and represented a clear improvement from the 0.7% decline seen in the same period last year.
Revenue for the quarter reached $6.84 billion, beating Wall Street forecasts of $6.70 billion. This figure also represented an increase from the $6.49 billion reported in the same quarter last year. Adjusted earnings per share came in at $3.19, five cents higher than analyst expectations and up from $2.97 in the prior year period.
Menu Innovation Drives Traffic
McDonald’s success this quarter stemmed largely from strategic menu additions and marketing campaigns. The introduction of McCrispy Chicken Strips in May provided a boost to customer traffic. These new menu items helped differentiate the chain’s offerings in an increasingly competitive fast-food landscape.
The company also capitalized on popular culture with a Minecraft-themed meal promotion. This campaign, launched in 100 countries starting in April, proved extremely popular with customers. The collectible figures included with the meals sold out in less than two weeks.
CEO Chris Kempczinski described the quarter as “a testament to the power of compelling value, standout marketing, and menu innovation.” The company’s focus on value offerings, including the Meal Deal promotion, helped attract price-conscious consumers back to its restaurants.
International Markets Show Strength
McDonald’s international performance was particularly strong during the quarter. International developmental markets posted a 5.6% same-store sales increase, led by Japan’s robust performance. This growth exceeded analyst forecasts of 3.6%.
International operating markets also performed well, with sales growth of 4%. This figure far surpassed the 1.8% increase that analysts had projected. The strong international results helped offset any remaining weakness in domestic markets.
Restaurants that had been open for less than a year saw their sales spike 6%. This metric suggests that new location openings are performing well and contributing to overall growth.
McDonald’s net income rose 11% to $2.25 billion during the second quarter. When adjusted for restructuring charges and other one-time items, the company earned $3.14 per share, meeting Wall Street expectations.
The company’s stock rose 3% in premarket trading following the earnings announcement. This positive market reaction reflected investor satisfaction with the turnaround in sales performance.
Wall Street analysts expect same-store sales to grow 1.9% for the full fiscal year. US same-store sales are projected to increase 1.2% for the full year. The company did not update its financial guidance in Wednesday’s earnings release.
McDonald’s recently launched the return of the Snack Wrap on July 10 at $2.99. This menu item was not included in the second quarter results but is expected to contribute to third-quarter performance.
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