McDonald’s surges on strong earnings

NEW YORK: McDonald’s enjoyed a fat day on Wall Street after wowing investors with better-than-expected earnings and progress in efforts to grow sales through delivery and other tech-oriented services.

Results in the key US market were boosted by a discounted soda promotion and the launch of premium sandwich offerings. Sales also were strong in Britain, Canada, Germany and China.

Investors were impressed with the company’s progress ramping up mobile order and mobile pay at more restaurants, and with its expansion of a delivery service, which has been launched at 4,000 restaurants in the US and other markets.

“We’re building a better McDonald’s and more customers are noticing,” said Chief Executive Steve Easterbrook.

“Our relentless commitment to running great restaurants and keeping the customer at the centre of everything we do is generating broadbased strength and momentum across our entire business.”

The fast-food chain saw its share price jump just under 5.0 per cent to close at $159.07.

Net income for the quarter ending June 30 surged 28 per cent, a $1.4 billion jump and easily topping analyst expectations. However, revenues dipped three per cent to $6.0 billion, partly due to the strong dollar and the refranchising of restaurants.

Sales rose 3.9 per cent in samestore US restaurants following a push to offer soft drinks in all sizes at just $1, and the launch of “Signature Crafted” sandwiches, which feature applewood smoked bacon, Dijon sauce and other premium ingredients.

Easterbrook, hired in 2015 to turn around the slumping business, said initiatives like the soda promotions are helpful in winning back customers who wrote off the chain.

Under Easterbrook, the company also has invested in restaurant beautification and higher pay for workers.