McDonald's U.S. Same-Store Sales Slip 0.2%, Yet Earnings Per Share Climb 10% To $3.51
Gains on restaurant sales and higher franchised margins carried quarterly profit, while the CEO pointed to a U.S. pickup after its value push.
McDonald's U.S. comparable sales fell 0.2% in the third quarter, yet diluted earnings per share rose 10% to $3.51 from $3.18, the company said Wednesday in an 8-K filing. The burger chain's global comparable sales rose 1.5%.
Profit grows on a flat top line
Revenue edged up 1% to $7,157 million, while operating income climbed 7% to $3,595 million and net income rose 9% to $2,486 million. Excluding restructuring charges, operating income rose 8%.
The company said the results were driven mainly by higher other operating income and higher sales-driven franchised margins. Other operating income reached $139 million, against $37 million a year earlier. Within it, gains on sales of restaurant businesses were $97 million versus $35 million, which the company tied to more restaurant sales in the U.S.
Pre-tax charges, mostly restructuring costs tied to Accelerating the Organization, an internal effort to modernize how the company works, were $56 million, against $39 million a year earlier. They cost 6 cents a share; excluding them, earnings per share were $3.57, up 11%. The company said those charges will continue through the program's anticipated completion during 2027.
Traffic fell in the U.S., check rose
In the U.S., negative guest counts were largely offset by higher average check. International Operated Markets comparable sales rose 1.4%, led by Germany and Australia and partly offset by France. International developmental licensed markets rose 4.2%, led by Japan and partly offset by China.
"In the U.S., we're encouraged by improvement as the quarter progressed following our intervention on value," said Chris Kempczinski, Chairman and CEO.
Systemwide sales rose 4% to over $38 billion. Sales to loyalty members across 70 markets were $41 billion over the trailing twelve months, with more than $11 billion in the quarter.
Spending, openings and the dividend
McDonald's, which says about 95% of its restaurants are run by independent owners, expects about $3.7 billion in 2026 capital spending and about 2,500 openings, targeting 50,000 global restaurants by the end of 2028.
The quarterly dividend was raised 4% to $1.93 per share, payable December 15. In the quarter the company repurchased 1.9 million shares for $519 million and paid $1.3 billion in dividends.
The 4% dividend increase to $1.93 per share is payable on December 15.
