$5 Signature Burgers, $1 Value Drinks Lift McDonald's Second Quarter Performance
- Author: Eleanor Harrison Jul 26, 2017,
Jul 26, 2017, 0:43
"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", Easterbrook said.
The company said same-store sales grew 6.6 percent globally, with same-store sales in the US jumping 3.9 percent.
For Domino's, which opened more than 200 new stores last quarter, it was a period defined by strong same-store sales and improved footprint.
Consolidated revenues decreased 3% (2% in constant currencies) due to the impact of the company's strategic refranchising initiative.
The brand's system-wide sales increased 8 percent and revenue came in about $90 million more than expected. Earnings rose to $1.70 a share, compared with a projection of about $1.62.
The company returned $1.8 billion to shareholders through share repurchases and dividends.
"The U.S. continues to build momentum as it executes strategies to enhance convenience, strengthen value and innovate around the menu to bring more customers to McDonald's more often", the company said.
Now two years into its turnaround under CEO Steve Easterbrook, the burger chain giant is attempting to reverse the drop in traffic at its restaurants in the US, its largest profit generator, by several different measures, including the preparation of its quarter pounders using free beef and its signature crafted higher end sandwiches. It did not specify how much customer visits contributed to the sales increase, but Easterbrook has repeatedly laid out plans to get the figure climbing again by making McDonald's more convenient. Operating income of franchising firm McDonald's Corp. for the quarter increased 5 percent, reflecting higher sales-driven franchised margin dollars, administrative savings and higher gains on sales of restaurants.
McDonald's reported higher second-quarter profits Tuesday behind strong comparable sales in key markets, including the United States, where the chain has launched new products and focused on customer service. China also benefitted from preparations for selling the McDonald's operations there. lower depreciation expense, primarily in China and Hong Kong, that in accordance with Held for Sale accounting rules, ceased recording depreciation.
For Domino's Pizza, net income increased 33.5% on the same period previous year to reach $65.7 million, driven by worldwide same-store sales growth of 2.6% and USA same-store sales growth of 9.5%.
"Whilst we're encouraged by our results from the first half of 2017, we're not complacent", said McDonald's CEO. Today, we're acting like a leadership brand, taking on new challenges and opportunities and moving with a greater sense of goal and urgency.