McDonald’s sales got a lift from Snack Wraps in the third quarter.
Same-store sales, or sales at locations open at least a year, rose 3.6% for the July-September period. That was slightly ahead of Wall Street’s forecast of 3.5%, according to analysts polled by FactSet.
Same-store sales rose 2.4% in the U.S. in the third quarter, the company said Wednesday.
The fan-favorite Snack Wraps returned to U.S. menus in July after a nine-year absence. U.S. traffic
to McDonald’s stores was 15% higher than average on the day they were released, according to Placer.ai, a data company.
McDonald’s also introduced Extra Value Meals in the U.S. in early September, hoping to woo back customers who’ve been turned off by high fast food prices. To kick off the promotion, McDonald’s offered an $8 Big Mac meal or a $5 Sausage McMuffin meal for a limited time in most of the country.
But Placer.ai said that promotion didn’t boost traffic as much as a more eye-popping 50-cent double cheeseburger, which McDonald’s offered on Sept. 18 to celebrate National Cheeseburger Day.
Third quarter revenue rose 3% to $7.08 billion, the Chicago company said Wednesday. That was in line with Wall Street’s expectations.
The company’s net income rose 1% to $2.28 billion. Adjusted for one-time items, including $39 million in restructuring charges, McDonald’s earned $3.22 per share. That was lower than the $3.33 analysts forecast.
McDonald's shares were flat in premarket trading Wednesday.
McDonald's increased spending on deals and marketing in the third quarter were likely on reason for the earnings miss. But customers' perception of value is becoming increasingly critical as customers worried about the economy visit restaurants less frequently.
Higher-priced fast casual chains Cava and Chipotle both reported weaker-than-expected results in the third quarter, saying younger consumers were pulling back on spending.
But value-oriented Taco Bell bucked that trend. Taco Bell parent Yum Brands said Tuesday that Taco Bell’s same-store sales rose 7% in the third quarter, driven by value items like its $3 Grilled Steak Burrito.
“We’re not seeing consumer pullback in the Taco Bell business. We do think the consumer in the U.S. is cautious but incredibly resilient,” Yum Brands CEO Chris Turner said. Turner said the brand saw more younger consumers and more families coming in to its stores in the third quarter.
