McDonald's sees U.S. sales rebound, but concerns about low-income consumers linger

McDonald's connected Wednesday reported quarterly net and gross that topped analysts' expectations arsenic buzzy promotions helped its U.S. restaurants rebound.

Despite the chain's improved show this quarter, executives are inactive disquieted astir the economical wellness of the low-income consumer. McDonald's is moving with its U.S. franchisees connected ways to marque its halfway paper items much affordable, beyond the $5 repast deal it rolled retired past summertime and the newer Daily Double burger promotion.

"Re-engaging the low-income user is critical, arsenic they typically sojourn our restaurants much often than middle- and high-income consumers," CEO Chris Kempczinski told analysts connected the company's net league call. "This bifurcated user basal is wherefore we stay cautious astir the wide near-term wellness of the U.S. consumer."

Executives said they expect that McDonald's results volition beryllium stronger successful the 2nd fractional of the year, peculiarly arsenic the concatenation faces easier comparisons successful the 4th fourth to the fallout from past year's E. coil outbreak.

Shares of the institution roseate 3% successful premarket trading.

Here's what the institution reported compared with what Wall Street was expecting, based connected a survey of analysts by LSEG:

• Earnings per share: $3.19 adjusted vs. $3.15 expected
• Revenue: $6.84 cardinal vs. $6.7 cardinal expected

The fast-food elephantine reported second-quarter nett income of $2.25 billion, oregon $3.14 per share, up from $2.02 billion, oregon $2.80 per share, a twelvemonth earlier.

Excluding restructuring charges and different items, McDonald's earned $3.19 per share.

Revenue rose 5% to $6.84 billion. Kempczinski credited the chain's value, selling and caller paper items for the 6% summation successful strategy income during the quarter.

Same-store sales, a metric that only tracks the show of restaurants that person been open astatine slightest a year, accrued 3.8%, the chain's biggest leap successful astir 2 years.

McDonald's U.S. restaurants saw same-store sales growth of 2.5%, reversing 2 consecutive quarters of domestic declines. Kempczinski said the burger concatenation outperformed its rivals by some same-store income and comparable traffic.

"Certainly, wide [quick-service restaurant] postulation successful the U.S. remained challenging, arsenic visits crossed the manufacture by low-income consumers erstwhile again declined by treble digits versus the anterior twelvemonth period," helium said.

This quarter, the burger chain's U.S. income received a boost from a tie-in repast with the "Minecraft" movie and the motorboat of the McCrispy Chicken Strips.

Shortly aft the 4th ended, Snack Wraps returned to menus for the archetypal clip successful 9 years; executives said that aboriginal results are "encouraging," and franchisees person voted to support the $2.99 promotional terms done the extremity of the year.

Outside the U.S., request for its Big Macs and gallic fries was adjacent stronger.

"I would conscionable note, besides connected our planetary side, it's not arsenic competitory a marketplace arsenic it is successful the U.S.," Kempczinski said. "I deliberation it's a small spot easier for america to basal retired and correspond bully worth successful international."

The chain's planetary developmental licensed markets division, which includes Japan and China, reported same-store income maturation of 5.6%.

Its planetary operated markets conception saw same-store income maturation of 4%, acknowledgment to gains in markets similar the United Kingdom, Australia and Canada. Executives said McDonald's worth and affordability scores from consumers person improved successful cardinal markets.