McDonald's U.S. sales revive amid stiff competition
By Lisa Baertlein and Sruthi Ramakrishnan
(Reuters) - McDonald's Corp's (MCD.N: Quote) turnaround remained on track in the latest quarter despite intense competition in the United States, helped by all-day breakfast, "McPick" value promotions and chicken McNuggets with simpler ingredients, the company said on Friday.
Sales at established U.S. restaurants rose 1.3 percent, amid industry softness that executives partly blamed on lower grocery prices that encouraged some diners to cook at home.
The result from the United States, which accounts for about 40 percent of overall profit at McDonald's, just exceeded analysts' lowered expectations, and was not as robust as the 2 percent U.S. same-store sales gain reported by rival Dunkin' Brands Group Inc DNKN.O on Thursday.
McDonald's international restaurants easily beat expectations on same-store sales growth in Britain, Australia, Canada and Germany.
As a result, global sales at restaurants open at least 13 months rose 3.5 percent for the third quarter, handily beating the 1.5 percent average gain expected by analysts.
McDonald's Chief Executive Officer Steve Easterbrook has vowed to transform the 60-year-old chain into a "modern, progressive burger company." He has introduced the all-day breakfast, banned the use of medically important antibiotics in U.S. chicken, and has been working to speed up service and make it friendlier.
Shares of McDonald's closed up 3 percent to $113.93, despite analyst warnings that fourth-quarter U.S. same-store sales could drop 2 percent due to the high bar set by the debut of the all-day breakfast in October 2015.
RBC Capital Markets analyst David Palmer pressed executives on the conference call about what they will do next, given the "common perception" that all-day breakfast and McPick "are running out of gas as sales drivers" in the United States. Continued...