Operations

McDonald's reports prediction-beating Q3 results, brighter path forward

McDonald's started its Monday off right with analyst-beating results from its third quarter, led by healthy U.S. sales for the period that ended Sept. 30.

November 9, 2020

McDonald's moved out in front in the third quarter of this highly atypical year that ended Sept. 30, thanks largely to its U.S. same-store sales. They jumped 4.6% during the quarter, despite difficulties in the Chicago-based company's international business due to the pandemic.

Marketing and customer communication efforts were credited with helping the company surpass analysts' estimates for the quarter of $1.90 EPS by turning in adjusted earnings per share of $2.22 and revenue of $5.42 billion exceeding the $5.4 billion analysts predicted.

Other key highlights include:

• Systemwide sales were flat with the prior year (down 1% in constant currencies).
• Quarterly cash dividend increased 3% to $1.29 per share(payable Dec. 15).
• Total revenue grew 35% to $74.2 million.
• Q3 adjusted EBITDA $25 million grew 21% compared to $20.7 million last year's quarter.
• Diluted earnings per share grew 11% of $2.35 (excluding strategic gains, $2.22).
• Global comparable sales declined 2.2%.

"The resilience of the McDonald's system was on display during the third quarter as the competitive strength of our business and the 3 D's — Digital, Delivery and Drive-thru — led to significant global comparable sales recovery," McDonald's CFO Kevin Ozan said in a separately issued release about the earnings results. "Our franchisees and restaurant teams around the world remain focused on running great restaurants and continuing to provide a safe environment for customers to enjoy our great tasting food."
McDonald's, which has 39,000 locations globally, said it began and ended the third quarter with nearly all restaurants globally open for business. However, as a result of COVID-19 resurgences,

Since September, the company said there have been numerous instances of government restrictions on operating hours, limited dine-in capacity in most countries and, in some cases, mandated dining room closures, mostly impacting stores in France, Germany, Canada and the U.K.