McDonald’s Corp. (MCD, Financial) rose to an all-time high after the company reported a better-than-expected second quarter on July 25.
The company’s second-quarter earnings per share of $1.70 beat estimates of $1.62. Revenue of $6.05 billion beat expectations of $5.96 billion.
After the announcement, shares climbed more than 4.4% to reach a new high of $159.64.
McDonald’s reported same-store sales increased 6.6% globally and 3.9% in the U.S., beating estimates of 3.7% growth globally and 2.9% growth in the U.S.
The fast-food restaurant chain attributed its positive performance to its $1 beverage promotion and the launch of signature crafted sandwiches. Steve Easterbrook, McDonald’s president and CEO, said the company delivered its strongest comparable sales and guest count results in more than five years.
"We're building a better McDonald's and more customers are noticing," Easterbrook said. "Our relentless commitment to running great restaurants and keeping the customer at the center of everything we do is generating broad-based strength and momentum across our entire business.”
The chart below illustrates the trend in McDonald’s revenue growth, which has been declining over the past several years.
Going forward, McDonald’s is focusing on innovating its menu, renovating locations, digital ordering and delivery to sustain growth and attract more customers. In addition, its “experience of the future” initiative is being implemented in around 650 locations this year. This initiative not only involves renovating restaurants, but incorporating ordering kiosks and table service into its dining experience. After this year, nearly 2,500 stores will be operating with these improvements.
Easterbrook said that while management is encouraged by results for the first half of the year, it is not fully satisfied and is taking on new challenges and opportunities to achieve its goals.
"We're building on our momentum, leveraging our size and scale and executing with greater precision against our priorities to retain, regain and convert customers by giving them even more reasons to visit and enjoy McDonald's,” Easterbrook said. “I'm confident that we're on the right path to continue positively impacting sales, guest traffic and customer satisfaction as we work to bring the biggest benefit to the most people in the shortest possible time."
Disclosure: I do not own any stocks mentioned.
