McDonald’s Corporation (MCD Quick QuoteMCD – Free Report) reported third-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate. Both metrics surpassed the consensus estimate for the fifth straight quarter and increased on a year-over-year basis.
Following the results, the company’s shares are up 3% in the pre-market trading session. During the quarter, MCD benefited from robust comparable sales.
Earnings & Revenue Discussion
During third-quarter 2023, McDonald’s reported adjusted earnings per share (EPS) of $3.19, outpacing the Zacks Consensus Estimate of $3.00. Adjusted earnings increased 16% from the prior year.
Quarterly net revenues of $6,692.2 million outpaced the consensus mark of $6,574 million. The top line rose 14% year over year.
At company-operated restaurants, sales were $2,556.2 million, up 20% year over year. Sales at franchise-operated restaurants amounted to $4,047.1 million and improved 10% year over year. Other revenues jumped 17% year over year to $88.9 million. Our model predicted sales by company-operated and franchise-operated restaurants to gain 9.6% and 6.6% year over year, respectively.
McDonald’s Corporation Price, Consensus and EPS Surprise
Comps Details
In the quarter under discussion, global comps expanded 8.8% compared with 11.7% in the prior-year quarter. Our estimate was 9.1%.
Strong Comps Across Segments
U.S.: During the third quarter, segmental comps rose 8.1% year over year compared with 6.1% a year ago. Comps benefited from a menu price increase, positive guest counts, marketing initiatives and robust digitalization. Our model estimated U.S. comps to climb 9.8%.
International Operated Markets: Segmental comps extended 8.3% year over year compared with 8.5% in the year-ago quarter. Strong comparable sales in the Germany and the U.K. resulted in the uptick. We anticipated a 9% year-over-year rise.
International Developmental Licensed Segment: Segmental comparable sales registered a 10.5% gain year over year compared with 16.7% in the prior-year quarter. McDonald’s benefited from robust comps in all geographic locations. Our model anticipated the metric to improve 7.8% year over year.
Operating Highlights & Expenses
During the third quarter, McDonald’s total operating costs and expenses were $3,483.9 million, up 12% year over year.
Operating income rose 16% year over year to $3,208.3 million. Net income totaled $2,317.1 million, up 17% year over year.