McDonald's shares surged early Friday on unexpectedly strong third-quarter results, with sales in overseas markets compensating for softness in its home market. The fast-food giant pointed to especially strong sales in Britain and Japan, as well as positive results in Australia, Canada and Germany. The news drove shares of the giant fast food chain up 3.4 percent to $114.33 in pre-market trade.
McDonald's scored a 3.5 percent gain in comparable global sales in the quarter, an acceleration from 3.1 percent in the second quarter. But in the US market, comparable sales rose by 1.3 percent, slower than the 1.8 percent growth in the prior quarter. The continued lift from the "All Day Breakfast" campaign is helping compensate for "continued industry softness," McDonald's said in a news release. "Our third quarter results, including our fifth consecutive quarter of positive comparable sales across all segments as well as improved restaurant profitability, are a testament to the progress we are making to satisfy the needs of today's dynamic customers," said McDonald's chief executive Steve Easterbrook.
Net income for the third quarter dipped 4.4 percent to $1.3 billion. That translated into $1.50 per share, a penny above analyst expectations. Net sales declined three percent to $6.42 billion, better than the $6.28 billion projected by analysts. After a lengthy slump, McDonald's promoted Easterbrook to chief executive in early 2015 to better position the company against an increasingly competitive environment that includes other fast food giants like Wendy's as well as gourmet chains like Shake Shack. McDonald's has responded by reorganising its international divisions and selling many restaurants to franchisees. The results included $128 million in one-time restructuring expenses.
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