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McDonald's says menu deals, promotions pushed Q2 results above predictions

July 26, 2019

If those golden arches seem to be glowing a little brighter as you pass by your neighborhood McDonald's, it could be the brand's second quarter financials giving it a bit of a power surge, since Q2 same-store sales beat what were already robust predictions. 

Global same-store sales were up 6.5%, well above the 5.1% analysts predicted. While revenues were flat there was a 3% increase in constant currencies, which the chain said reflects strong comparable sales, according to a press release. Other Q2 2019 highlights include:

• 8% increase in systemwide sales in constant currencies.
• 1% growth in consolidated operating income (4% in constant currencies).
• 4% increase in diluted EPS of $1.97 (7% in constant currencies), including $0.08 per share of strategic charges. 
• $2 billion returned to shareholders through share repurchases and dividends.

"With the strong results we achieved in the second quarter, we have now experienced 16 consecutive quarters of positive global comparable sales," McDonald's President and CEO Steve Easterbrook said in a summary of the second quarter financials. "By putting our customers at the center of all our efforts to run great restaurants, enhance the customer experience and provide delicious menu offerings, we will continue to successfully execute our Velocity Growth Plan."

In the U.S., second quarter comparable sales increased 5.7%, which the company said reflects the success of its national and local deal offerings, as well as positive impact from deployment of future-oriented system initiatives and core menu strength. 

Q2 operating income grew 5% as a result of the comparison to the strategic restructuring charge during last year's quarter. Excluding that cost, operating income fell 3%, which McDonald's said reflects smaller gain on restaurant business sales. 

Internationally, sales grew 6.6% which the brand attributed to positive results across all markets, but driven primarily by the U.K., France and Germany. The segment's operating income increased 3% (8% in constant currencies), primarily due to sales-driven improvements in franchised margin dollars.

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