Financing

Digital, marketing and price hikes lift McDonald's sales

The burger giant’s U.S. same-store sales rose 8.1% last quarter and its earnings increased more than expected. The company cited better execution inside its restaurants.
McDonald's digital
Delivery and digital sales have powered McDonald's in recent years. | Photo: Shutterstock.

McDonald’s U.S. same-store sales rose 8.1% in the third quarter, the company said on Monday, as the company’s marketing and operations efforts helped build digital and delivery sales.

Price increases helped, too.

It was the 13th straight quarter of domestic growth in the key metric. The company has had only one negative quarter in its biggest market since the fourth quarter of 2016.

Globally, same-store sales rose 8.8% in the quarter, and 18.3% on a two-year stacked basis, as its restaurants generated strong performance in each of its major markets.

Digital has been a major reason. McDonald’s generated nearly $9 billion in digital sales in its six largest markets, generating more than 40% of their systemwide sales, the company said.

Domestically, McDonald’s said its sales were driven by “strong average check growth driven by strategic menu price increases.” There was no talk about traffic, which had increased in recent quarters and helped drive sales.

Still, the company said it is getting growth in digital and delivery. It also cited marketing programs—the company had a high-profile marketing arrangement with Marvel Studios’ Loki Season 2, for instance.

Revenues at the company increased 14% to $6.7 billion. Net income increased 17% to $2.3 billion, or $3.17 per share. Earnings per share bested investor expectations, according to the website Earnings Whispers.

McDonald’s sales have been thriving largely due to marketing, coupled with its investments in digital and delivery. The company may be getting some benefit from trade-down as inflation has customers tightening their purse strings.

McDonald’s has been warning of a downturn for much of the past year. “The macroeconomic environment is unfolding with our expectations for the year,” CEO Chris Kempczinski said in a statement. "And we continued to deliver convenience and value for our customers.”  

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