CHICAGO โ McDonaldโs Corp. sustained a โslight dipโ in traffic during the recent quarter relative to the year-ago period as consumer spending remains pressured, said Christopher J. Kempczinski, president and chief executive officer.
โWhat you end up seeing is that the pressure is felt more on the lower-income consumer,โ Mr. Kempczinski said during an Oct. 30 investor call. โAnd, so, one of the things that we saw industry-wide is that, that low-income consumer, which we would say is $45,000 and under, was negative from an industry standpointโฆ
โSo, I think we’re just going to need to continue to keep a close eye on that $45,000-and-under consumer because of the pressure that they’re feeling there and make sure that we’re offering value, but hopefully, the industry stays disciplined as well on pricing.โ
Ian F. Borden, chief financial officer, added, โWe continue to gain share with both the middle- and higher-income consumers, and … we held share with the lower-income consumer in a pretty competitive marketplace. But I think the headline is that the comparable industry traffic was down in the quarter as it has been for the last couple of quarters. And, so, our comparable traffic was marginally down as a result of that.โ
Net income for the third quarter ended Sept. 30 was $2.32 billion, equal to $3.17 per share on the common stock, up 17% from $1.98 billion, equal to $2.68 per share, in the prior-year period. Results in the latest quarter included pre-tax charges of $26 million related primarily to restructuring costs.
Revenues totaled $6.69 billion, up 14% from $5.87 billion a year ago.
โAs we expected and as we mentioned in prior earnings calls, our top-line growth, while strong across each of our segments and at an elevated level versus historical norms, has continued to moderate,โ Mr. Kempczinski said. โHowever, we continue to outpace our competitors, thanks to our system’s outstanding execution of our โaccelerating the archesโ strategy. Over the past year, we’ve been more intentional about sharing and scaling world-class ideas that drive impact globally. Central to our continued strength is how we maximize our marketing to stay relevant to customers.
โIn August, we launched โas featured in,โ in over 100 markets, making it our largest global campaign to date. The campaign celebrates the most memorable McDonald’s references across the world of entertainment with over 20 McDonald’s integrations that span across Hollywood, Bollywood, anime and independent film. It’s also another proof point of the impact and power that a โone McDonald’s wayโ approach to marketing can have to drive engagement, allowing our markets to remain globally consistent but locally relevant.โ
Global comparable sales grew 8.8%, driven by comparable sales growth across all segments. Comparable sales in the US market grew 10%, benefiting from strategic menu price increases.
โWhen you take our physical presence, having more restaurants in the US than anyone else; our digital presence, which is bigger than anybody else in the US; along with great execution, which we’re seeing with strong consumer satisfaction scores; our service times are down roughly nine seconds in the quarter,โ Mr. Kempczinski said. โThey’re down slightly less than that, but still down, I think, about seven seconds on the full year. We’re in a really strong position in the US to continue the growth that we’ve got.โ
Comparable sales in international operated markets increased 14%, led by strong comparable sales in the United Kingdom, Germany and Canada. In international developmental licensed markets, comparable sales grew 11%, with growth in all geographic regions.
Net income for the nine-month period was $6.43 billion, equal to $8.76 per share, up 50% from $4.27 billion, equal to $5.75 per share, last year. Year-to-date revenues totaled $19.09 billion, up 11% from $17.26 billion.
Shares of McDonaldโs Corp. trading on the New York Stock Exchange closed on Oct. 30 at $260.15, up 1.7% from the previous close of $255.76.
