McDonald's sales recovered in the third quarter, driven by a 4.6% growth in the USA
McDonald's (MCD) shares, which have increased 9.6 per cent since the beginning of the year, rose by more than 5 per cent in trading on Monday 9 November after the company published its third quarter pre-market report.
In the three months from July to September, McDonald's, the international fast food chain, reported a significant recovery in sales as well as an increase in profits after the previous two quarters of decline.
Earnings per share for Q3 increased by 5% (compared to last year) to $2.22, $0.32 more than the analyst estimate of $1.90. In Q2 and Q2, McDonald's reported declines of 68% and 15% respectively.
The amount of profit increased by 10% to $1.76 billion compared to $1.61 billion a year earlier, which was facilitated by profit from the sale of part of McDonald's share in its Japanese branch.
Total quarterly revenue was $5.42 billion compared to $5.43 billion in the third quarter of 2019, slightly above the analyst estimate of $5.4 billion.
However, McDonald's total global sales fell 2.2 per cent in the quarter due to slower recovery in international markets.
McDonald's said it will increase quarterly cash dividends by 3% to $1.29 per share. The company confirmed that it plans to spend $1.6 billion on capital expenditure this year as it sees positive results in modernising its restaurants. Despite the pandemic, McDonald's predicts some 950 new restaurants to open, 270 of which will be in the US and international markets, including France and the United Kingdom. At the same time, the company will close a significant portion of the restaurants in the US that have brought low sales.