McDonald’s Sales Beat Forecasts on Value Menu Strength

McDonald’s achieved better-than-forecast second-quarter financial results because its budget-friendly promotions attracted more customers in both the United States and international markets. The company achieved 3.8% growth in global same-store sales which exceeded market predictions of 2.4% and caused a 2.3% increase in stock prices at the beginning of trading.

The chain achieved its goal of re-engaging low-income customers through its value deals which include the $5 meal bundle and buy-one-get-one-for-$1 promotions. McDonald’s launched a Happy Meal promotion linked to the upcoming “Minecraft” movie during April and introduced McCrispy Chicken Strips as a permanent menu item in May.

CEO Chris Kempczinski emphasized that budget-conscious consumers need to be won back because they visit McDonald’s restaurants more frequently than customers from higher income brackets. Placer.ai reported that McDonald’s achieved better quick-service restaurant traffic performance than the market during the quarter.

The U.S. comparable sales increased by 2.5% after showing a 0.7% decrease during the previous year. The 4% sales growth in international operated markets was driven by strong performance in the UK, Canada and France while franchised partner markets achieved a 5.6% increase with Japan leading the way.

The company achieved $3.19 in adjusted earnings per share which exceeded the predicted $3.15. The analysts attributed McDonald’s success to its use of nostalgia and menu innovation and price adjustments which helped the company outperform Yum Brands and Chipotle during their demand slowdown.