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What McDonald's earnings mean for the restaurant industry

 

McDonald’s reported third-quarter results Monday morning, including an 11% increase in global systemwide sales, and 8.1% increase in U.S. comp sales. In a release, the company notes domestic comp sales benefited from a strong average check growth driven by menu price increases, as well as restaurant-level execution, effective marketing campaigns, and continued digital and delivery growth.

Those menu price increases are up just over 10% for the full year, CFO Ian Borden said during the earnings call, adding that he expects pricing to come down now that inflation is starting to cool. That said, the chain is experiencing some traffic pressures, particularly among lower-income consumers - $45,000 and below.

Value was a major theme on the call, with executives pointing to value promotions from various markets, such as a McMuffin/coffee deal in Canada that drove strong performance during the breakfast daypart, Germany’s McSmart menu that offers smaller and more affordable meal options, and the $1, $2, $3 Dollar Menu in the U.S. Kempczinski said the company is not seeing changes “in terms of customer acceptance on pricing.”

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