McDonald's earnings beat, but traffic to its U.S. restaurants falls

Key points

• McDonald's U.S. same-store sales fell 0.2% as traffic to domestic restaurants declined.
• Global same-store sales rose 1.5%, beating analysts' 1.3% estimate on international growth.
• Third-quarter net income was $2.49 billion, or $3.51 per share, up from a year earlier.

McDonald's reported mixed fiscal third-quarter results on Wednesday, with U.S. same-store sales down 0.2% as traffic to its domestic restaurants fell. The decline was smaller than the 0.5% drop Wall Street had expected, according to a StreetAccount survey of analysts.

Globally, same-store sales rose 1.5%, topping analysts' forecast of 1.3%, helped by the company's international segments. Net income came in at $2.49 billion, or $3.51 per share, up from $2.28 billion, or $3.18 per share, a year earlier. Excluding restructuring charges and other items, McDonald's earned $3.57 per share. Shares rose more than 2% in premarket trading.

International markets drive growth

The international developmental licensed markets division, which includes Japan and China, posted same-store sales growth of 4.2%, well above the 2.1% analysts had forecast. The international operated division, which includes Australia and Germany, saw growth of 1.4%, short of the 2.1% expected, with France named as a weak spot.

In the U.S., we're encouraged by improvement as the quarter progressed following our intervention on value

— Chris Kempczinski

CEO cites value push

At the company's September investor day, executives said U.S. same-store sales were slightly negative in July and August but expected September to return to growth. CEO Chris Kempczinski said the company was "encouraged by improvement as the quarter progressed following our intervention on value." He said in August that the U.S. business was falling short on execution, particularly in rolling out value offerings.