McDonald’s shares rise as fast-food chain beats sales estimates again

Oct 23, 2018

Share

McDonald’s Corp. rose after the company reported comparable sales that beat global estimates, indicating the chain is winning ground in the fierce fight for fast-food market share.

  • Total same-store sales climbed 4.2 per cent, even as McDonald’s home market slightly missed growth estimates.

Key Insights

  • McDonald’s, which gets nearly two-thirds of revenue from overseas, said comparable sales in its international lead markets division that includes Australia and the U.K. topped estimates, rising 5.4 per cent. The high-growth segment, which includes China, also beat.
  • Its low-cost strategy continues to pay off as diners flock to discounts in a fast-food race to the bottom. Its large size with 37,000 locations gives it a commodity-buying advantage, meaning the chain and its franchisees can afford to lower prices more than competitors.
  • The recent push into delivery with Uber Eats also is helping sales domestically, though other rivals are starting to catch up on door-to-door service.

Market Reaction

  • The shares rose as much as 2.6 per cent before the start of regular trading in New York amid a wider stock selloff. The stock was down 3.2 per cent this year through Monday’s close.

--With assistance from Vivian Li (Bloomberg Global Data)