McDonald's beats by $0.01, reports revs in-line; ses October comps flat Reports Q3 (Sep) earnings of $1.52 per share, $0.01 better than the Capital IQ Consensus Estimate of $1.51; revenues rose 2.4% year/year to $7.32 bln vs the $7.34 bln consensus; global comps +0.9%.
• In the U.S., comparable sales increased 0.7% in the third quarter while operating income rose 5%. During the quarter, the U.S. featured new core favorites and the popular Monopoly promotion and introduced Mighty Wings with a national, limited-time offer. Looking ahead, the U.S. is focused on fortifying its value leadership position and leveraging recently introduced chicken, beef and beverage options to enhance sales and profitability. • For the quarter, Europe's comparable sales rose 0.2%. Operating income increased 11% (up 8% in constant currencies) reflecting strong performance in the U.K. and Russia and solid results in France, partially offset by Germany. Throughout Europe, ongoing efforts to recalibrate key market value platforms and enhance the McDonald's experience through menu innovation and marketing are designed to strengthen the business for the long term. • Comparable sales in Asia/Pacific, Middle East and Africa (APMEA) declined 1.4% for the quarter. Third quarter operating income declined 12% (down 4% in constant currencies) reflecting weakness in China, Japan and Australia due, in part, to the ongoing challenging environment. Throughout the segment, APMEA remains aligned behind the key priorities of accelerating growth at the breakfast and late-night dayparts, enhancing local relevance and broadening accessibility with branded affordability, expanded conveniences and new restaurant openings. • Looking ahead, the Company expects the dynamics of the current environment to persist. For the fourth quarter, the Company expects global comparable sales performance to be in-line with recent quarterly trends while restaurant margin percentages are expected to decline at a level relatively similar to first quarter results. Global comparable sales for the month of October are expected to be relatively flat.