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McDonald’s sales returned to growth after the burger chain expanded its menu with chicken offerings and used novelties such as Minecraft-themed meals to lure back price-conscious diners.
Global same-store sales rose by 3.8 per cent year on year in the quarter that ended in June, well above analyst estimates for a 2.6 per cent increase and the highest in almost two years.
In the US, where McDonald’s has about 14,000 restaurants, sales at locations open for at least a year rose by 2.5 per cent, also ahead of estimates compiled by Visible Alpha, thanks largely to bigger purchases. American sales in the prior quarter had slumped on what executives described as economic pressures on consumers.
Fast-food restaurants have struggled in recent months to prove their value to consumers, especially those with lower incomes. Overall foot traffic declined by 0.9 per cent in the second quarter, according to Revenue Management Solutions, an industry consultancy, even as the pace of price rises slowed.
Results have been patchy in the latest batch of earnings from fast-food chains. Yum Brands on Tuesday reported that same-store sales grew at its Taco Bell and KFC divisions. But Chipotle Mexican Grill reported a 4 per cent decline in like-for-like sales and cut its target for the year.
McDonald’s system-wide sales, which include both franchised and company-owned stores, increased by 8 per cent in the quarter — a gain that chief executive Chris Kempczinski said was a “testament to the power of compelling value, standout marketing and menu innovation”.
Among its promotions, McDonald’s in April sold meals tied to A Minecraft Movie, the film about the popular video game. In May it relaunched chicken strips in the US, and later introduced a large Big Arch burger in France and the UK.
In July, McDonald’s brought back $2.99 Snack Wraps after years off the menu, leading to queues at some US stores. About 500 US stores will test an assortment of beverages such as cold coffees this summer.
Revenue in the quarter totalled $6.8bn, up 5 per cent and higher than the consensus estimate of $6.7bn compiled by Visible Alpha. Net income of $2.25bn was up 11 per cent year on year and edged past estimates.
McDonald’s shares were up about 1.3 per cent shortly after Wall Street’s opening bell on Wednesday.