McDonald's announced its third quarter results as of September 30, 2023 on October 30th, with revenue and profits exceeding market expectations. McDonald's is a leading global food service retailer with over 40000 stores in over 100 countries.
According to the latest financial report, the company's revenue in the third quarter increased by 14% year-on-year to $6.69 billion, higher than Wall Street's expectation of $6.56 billion; Net profit increased by 17% to reach 2.3 billion US dollars; Diluted earnings per share were $3.17, an increase of 18% (calculated at a fixed exchange rate of 15%), exceeding the expected $3; The company announced a 10% increase in quarterly cash dividends to $1.67 per share.
In terms of sales, McDonald's global comparable sales increased by 8.8% in the third quarter, higher than the analysts' average expected growth of 7.36%, reflecting strong comparable sales in all sub markets.
Specifically, driven by strategic price increases, the company's comparable sales in the United States increased by 8.1%. McDonald's Chief Financial Officer Ian Borden said that the company did increase prices in the US market in the third quarter, but the increase was relatively small. McDonald's expects its annual price increase in the United States to be slightly higher than 10%.
The price increase has brought pressure to consumers, and McDonald's customer traffic in the United States has decreased. McDonald's CEO Chris Kempczinski stated that consumers with annual income below $45000 have decreased their visits to McDonald's.
In addition, driven by strong demand in the UK, Germany, and Canada markets, McDonald's comparable sales in the international operating market increased by 8.3%. Boden stated that despite the intensification of inflation in Europe, the international sector's passenger traffic continued to grow in the current quarter.
The financial report also shows that the company's comparable sales in the international development licensing market, including China and Japan, increased by 10.5%; 14% increase in comprehensive income (11% at fixed exchange rates); The sales revenue of the entire system increased by 11% (calculated at a fixed exchange rate of 10%); The comprehensive operating revenue increased by 16% (calculated at a fixed exchange rate of 13%), and the pre tax expenses were $26 million.
Furthermore, it is worth mentioning that McDonald's entire system's digital sales - including sales on applications, express delivery, or kiosks - total nearly $9 billion in its six major markets, accounting for 40% of total sales. This exceeded the digital sales of $8 billion in the second quarter, up from nearly $7 billion in the same period last year.
McDonald's President and CEO CHRIS KEMPCZINSKI stated that with global sales growing by 11%, the company's performance in the third quarter reflects our strength as an industry leader. The development of the macroeconomic environment is in line with expectations and will continue to provide convenience and value to customers.