International fast food giant McDonald’s has posted its biggest jump in global sales at established restaurants in five years, helped by stronger traffic worldwide and US initiatives including drink specials and custom sandwiches.
The company is getting customers back into its restaurants after years of declining traffic.
It saw an increase in US diners last quarter — a key milestone that has proved elusive to chief executive Steve Easterbrook — and posted same-store sales that handily beat analysts’ estimates. The company’s shares rose the most in three months, hitting a record high.
The results mark a victory for the 49-year-old CEO, who has been working to overhaul McDonald’s for the past two years. Even after he managed to increase sales at the world’s largest restaurant chain — helped by higher prices — it’s taken longer to get more people in the door.
As many of its fast-food competitors struggle, McDonald’s has boosted sales with cheaper drinks, all-day breakfast, and higher-quality chicken.
The chain is also improving kitchen equipment to make its food taste better. Same-store sales rose for the eighth-straight quarter and it posted its biggest jump in global sales at established restaurants in five years.
Global same-restaurant sales climbed 6.6% in McDonald’s second quarter, beating the 4% growth estimated by analysts, the company said.
Sales at US-based restaurants open at least 13 months rose 3.9% in the second quarter, topping the 3.2% increase expected by analysts, according to research firm Consensus Metrix.
Strong sales in China lifted comparable sales gains in McDonald’s high-growth segment to 7%, almost double the 3.6% increase expected by analysts. That came in contrast to sluggish results from Yum China Holdings, the China operator of KFC and Pizza Hut.
Mr Easterbrook, who took over in March 2015, also has contended with a record run of grocery deflation that has made restaurants a tougher sell to many Americans. Chains have had to work harder to compete with supermarkets, where eggs and other staples are increasingly cheap.
“We’re building a better McDonald’s and more customers are noticing.”
In March, company executives said McDonald’s had lost over 500m transactions in its home market since 2012. Most of those customers defected to other traditional fast-food competitors.
McDonald’s sees delivery services and digital ordering options as the key to attracting more diners.
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