On Tuesday, McDonald’s Corp has reported an increase, larger than anticipated, in quarterly U.S. comparable sales. Promotions such as $1 beverages and its McPick 2 for $5 have assisted to attract more customers.
The sales from U.S. restaurants, that have been open for a minimum of 13 months, rose 4.1 percent. Analysts had anticipated and increase of 3.4 percent growth on average.
McDonald’s has been working diligently to overturn the decline in traffic at its U.S. restaurants, where most of the company’s profit comes from, with new menu items and changes. Changes have included fresh beef Quarter Pounders, premium customizable sandwiches such as the Signature Sriracha sandwich, as well as mobile ordering and even delivery.
Aggressive value campaigns such as soft drinks of all sizes for $1, McCafe beverages including smoothies and espresso drinks for $2, and the McPick 2 offer, which allows customers buy two menu items for $5, has also increased sales.
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The global comparable sales for the world’s largest fast-food chain by revenue increased by 6 percent, which is above the 4.5 percent increase anticipated by analysts.
During the third quarter, net income climbed to $1.88 billion, or $2.32 per share from last years $1.28 billion, or $1.50 per share. The company earned profits of $1.76 per share, just short of the average analyst estimate of $1.77 per share.
After the company increased the franchising its restaurants, total revenue dropped 10.4 percent to $5.75 billion. Analysts had expected revenue of $5.74 billion.
“During the quarter, we refranchised our businesses in China and Hong Kong, reaching our target to refranchise 4,000 restaurants more than a year ahead of schedule,” Chief Financial Officer Kevin Ozan stated.
Franchising removes the cost of operating those restaurants and substitutes sales with expected rent and royalty payments based on a percentage of the restaurants sales.