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Marketing efforts lifted McDonald’s sales last quarter

Camp McDonald’s helped propel digital sales at the burger giant, though the strong dollar caused some headaches. The company also warned of a potential recession in the U.S. and Europe.
McDonald's earnings
Marketing promotions, notably Camp McDonald's in July, led to strong results for the burger chain. / Image courtesy of McDonald's.

McDonald’s customers apparently went camping last quarter, lifting the company’s sales and driving more people to its loyalty program.

The Chicago-based burger giant said on Thursday that its U.S. same-store sales rose 6.1% in the third quarter, driven largely by the company’s marketing promotions such as the month-long “Camp McDonald’s” digital promotion in July.

The promotion helped drive more digital sales at the company. McDonald’s generated nearly $7 billion in sales through digital channels in its top six markets last quarter, more than a third of total sales in those markets.

Delivery sales also contributed to the company’s U.S. results. CEO Chris Kempczinski said Thursday that the company had one of its best quarters for delivery sales domestically during the period. 

The company said that sales grew from higher prices and higher traffic. Worldwide, same-store sales rose 9.5%, the company said.

“It’s safe to say that the McDonald’s team is hitting on all cylinders,” Kempczinski said.

The strong sales were not enough to offset the strong dollar, however. McDonald’s said its revenue declined 5% in the third quarter ended Sept. 30, to $5.9 billion from $6.2 billion. It would have been a 2% increase, however, had currency rates not changed. The strong dollar, in other words, weakened the value of the revenue McDonald’s receives in global markets.

Company executives on Thursday warned about “macroeconomic challenges,” suggesting that high inflation and rising interest rates are putting pressure on the consumer.

Kempczinski said McDonald’s was considering “a wider range of scenarios as we look ahead,” but he said the company expects “a mild to moderate recession in the U.S. and a little deeper and longer” recession in Europe.”

Net income at the company declined 8% to $2 billion, or $2.68 per share. Net income fell 1% without the impact of currency changes. The company blamed the profit challenges on the impact of restaurant closures in Russia and Ukraine along with inflation at corporate restaurants.

McDonald’s sales and traffic have been outperforming the broader fast-food industry in recent months, a sign that inflation may be leading more customers to flock to the Golden Arches.

It’s also a sign of the company’s marketing strength and its major digital push. Camp McDonald’s featured discounts on products, menu hacks and even a Retro Grimace Pool Float throughout the month on the company’s mobile app. There was high demand for the float, though some customers had some problems obtaining one.  

McDonald’s has been pushing digital sales, particularly through its app. That’s where many of the company’s value offers and other promotions have been focused, as the company wants to increase membership in its McDonald’s Rewards loyalty program. The company has more than 25 million active loyalty members in the U.S.

The quarter did not include the impact from the company’s Cactus Plant Flea Market promotion earlier this month. Executives said the company sold half of its supply of the boxes in four days and expect October U.S. same-store sales to be in the double digits.

UPDATE: This story has been changed from its original version to add new information.

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