mcdonalds The company’s U.S. restaurants reported better-than-expected same-store sales growth, although sales on Wednesday fell short of Wall Street expectations.
Chief Executive Officer Chris Kempczinski said in a statement that the third quarter results are “a testament to our ability to achieve sustainable growth in a challenging environment.”
For more than a year, McDonald’s, long considered a beacon of consumer financial health, has been warning of a decline in restaurant spending, especially by low-income customers. This weakness continued in the third quarter.
“Consumer demographics continue to polarize, with low-income consumer (quick-service restaurant) customer traffic declining by nearly double digits in the third quarter, a trend that has continued for nearly two years,” Kempczinski said on the company’s conference call. “In contrast, QSR traffic growth among high-income consumers remains strong, with nearly double-digit growth this quarter.”
He added that McDonald’s expects pressure on consumers’ financial health to continue into 2026.
The company’s shares rose more than 3% in morning trading.
Here’s how the company reported compared to Wall Street expectations, based on a survey of analysts by LSEG.
Earnings per share: $3.22 adjusted vs. $3.33 expected Revenue: $7.08 billion vs. $7.1 billion expected
The fast food giant reported third-quarter net income of $2.28 billion, or $3.18 per share, up from $2.26 billion, or $3.13 per share, in the year-ago period. McDonald’s’ effective tax rate rose during the quarter, putting pressure on its profits.
Excluding restructuring charges and other items, the burger chain earned $3.22 per share.
Sales increased 3% to $7.08 billion.
A McDonald’s restaurant photographed on July 22, 2024 in Burbank, California.
Tama Mario | Getty Images
The company’s same-store sales rose 3.6%, according to Street Accounts, reversing a 1.5% decline in the same period last year and roughly in line with Wall Street expectations.
In the U.S., McDonald’s same-store sales rose 2.4%, beating Street Account estimates of 1.9%. The company acknowledged average check growth, suggesting customers are paying more for their meals despite an ongoing “value war” among fast food chains.
To appeal to budget-conscious consumers, McDonald’s is bringing back snack wraps for the first time in nine years, priced at $2.99. CFO Ian Bowden said this was one of the most popular chicken launches in recent history in the US, with nearly one in five customers purchasing a snack wrap in the first four weeks.
And in September, the chain reintroduced Extra Value Meals, which it had last promoted before the coronavirus pandemic. Executives said McDonald’s value service is helping the chain gain market share among high-income customers.
“I think sometimes there’s this idea that value only matters to low-income (consumers),” Kempczinski said. “But value is important to everyone, whether you’re high-income, middle-income or low-income, and it’s important to feel like you’re getting good value for your money.”
Outside the United States, McDonald’s same-store sales growth was even stronger. The International Operating Markets segment, which includes Australia and Canada, reported a 4.3% increase in same-store sales.
“The value platform we have been implementing in the IOM market for several quarters is resonating with our customers and continues to improve our value and affordability scores,” Kempczinski said.
Additionally, McDonald’s International Development License Market segment saw same-store sales increase by 4.7%, supported by demand in Japan.
The company expects U.S. same-store sales to grow further in the fourth quarter, driven by the return of McDonald’s Monopoly and Extra Value Meals. The chain also struggled with comparisons to last year’s fourth quarter, when an E. coli outbreak weighed on domestic sales.
But the company’s international division could see slower same-store sales growth next quarter as both segments face tougher comparisons, Borden said.
Correction: McDonald’s has priced the new Snack Wrap at $2.99. A previous version of this article listed the price incorrectly.
