McDonald’s sales got a boost from Snack covers In the third quarter.
Same-store sales, or sales at locations open at least a year, rose 3.6% during the July-September period. That was slightly higher than Wall Street’s forecast of 3.5%, according to analysts polled by FactSet.
Same-store sales rose 2.4% in the United States in the third quarter, the company said Wednesday.
Fan-favorite Snack Wraps returned to US menus in July after a nine-year absence. U.S. traffic to McDonald’s stores was 15% above average on its launch day, according to data firm Placer.ai.
McDonald’s also provided Extra value meals in the United States in early September, hoping to attract customers turned off by high fast-food prices. To kick off the promotion, McDonald’s is offering an $8 Big Mac or a $5 Sausage McMuffin for a limited time in most parts of the country.
But Placer.ai said the promotion didn’t boost traffic as much as it contributed to the rise of the 50-cent double cheeseburger, which McDonald’s introduced on Sept. 18 to celebrate National Cheeseburger Day.
The Chicago company said Wednesday that third-quarter revenue rose 3% to $7.08 billion. This was in line with Wall Street expectations.
The company’s net income increased by 1% to $2.28 billion. After adjusting for one-time items, including $39 million in restructuring charges, McDonald’s earned $3.22 per share. This was lower than analysts’ expectations of $3.33.
McDonald’s shares were flat in pre-market trading on Wednesday.
McDonald’s increased spending on deals and marketing in the third quarter was likely the reason for the earnings miss. But customers’ perception of value has become increasingly critical as customers concerned about the economy visit restaurants less frequently.
High-priced fast-food chains Cava and Chipotle reported weaker-than-expected third-quarter results, saying younger consumers were holding back on spending.
But value-oriented Taco Bell has bucked that trend. Taco Bell’s parent company, Yum Brands, said Tuesday that Taco Bell’s store sales rose 7% in the third quarter, driven by value items like the $3 Grilled Steak Burrito.
“We don’t see a consumer decline in Taco Bell’s business,” said Chris Turner, CEO of Yum Brands. “We believe the U.S. consumer is cautious but incredibly resilient.” Turner said the brand saw more younger consumers and more families coming to its stores in the third quarter.