By Savyata Mishra
(Reuters) -McDonald’s global comparable sales for the second quarter beat Wall Street estimates on Wednesday, as affordable meal bundles and promotions drew in budget-conscious diners looking to stretch their dollars amid economic uncertainty.
Strong demand in the U.S. and international markets powered a 3.8% rise in global same-store sales, above expectations of a 2.4% rise, according to data compiled by LSEG.
Shares of the Chicago, Illinois-based company rose 3.4% in premarket trading.
Fast-food chains have seen competition heat up as companies such as McDonald’s, Domino’s Pizza and Taco Bell owner Yum Brands double down on value meals to counter a slowdown in demand, mainly among the lower-income households.
To improve sales, McDonald’s launched a limited-time Happy Meal offer for kids and adults tied to the “Minecraft” Movie promotion in April. In May, it introduced McCrispy Chicken Strips as a permanent menu item.
These promotions are in addition to the $5 meal deal and the buy-one, add-one for $1 offers launched last year.
Menu innovation and promotions had also helped Domino’s report upbeat U.S. same-store sales, while weakening demand hurt sales at Yum Brands and Chipotle Mexican Grill.
For the second quarter, McDonald’s outperformed the wider quick-service restaurant category, with visits rising 0.8% from a year ago and compared to a 0.7% dip in the QSR space, data from foot traffic tracking firm Placer.ai showed.
“While rivals like Yum Brands and Chipotle struggled with consumer pullback, McDonald’s played to its strengths by leaning into value, nostalgia and limited-time promotions,” eMarketer analyst Zak Stambor said.
Comparable sales in U.S., McDonald’s biggest market, grew 2.5%, compared with a 0.7% decline a year ago.
Sales in its business segment where restaurants are operated by local partners, jumped 5.6%, led by Japan, while international markets sales rose 4%, owing to a demand recovery in the UK, Canada and France.
Adjusted net income came in at $3.19 per share, up 7% from a year ago. That surpassed estimates of $3.15 per share.
(Reporting by Savyata Mishra in Bengaluru; Editing by Arun Koyyur)
