McDonald’s Corp. (NYSE: MCD) reported third-quarter 2016 results before markets opened Friday. The fast-food restaurant chain posted diluted earnings per share (EPS) of $1.50 on revenues of $6.42 billion. In the same period a year ago, the company reported EPS of $1.40 on revenues of $6.62 billion. Third-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $1.49 and $6.28 billion in revenues.
U.S. same-store sales rose 1.3% year over year in the third quarter. McDonald’s essentially attributed the gain to menu changes. Operating income in the United States rose 8% reflecting improved restaurant profitability and higher gains from refranchising.
Comparable sales for the International Lead Markets segment increased 3.3% for the third quarter led by strong performance in Australia, the United Kingdom, Canada and Germany. Third-quarter operating income increased 2% (increased 5% in constant currencies).
In the High Growth Markets segment, third-quarter comparable sales increased 1.5%, reflecting positive performance in nearly all markets, partially offset by negative comparable sales in China due in part to temporary protests related to events surrounding the South China Sea and comparison against very strong prior year results. Operating income increased 8% (10% in constant currencies).
Globally, same-store sales in the third quarter rose 3.5% and consolidated operating income was up 5% (up 7% on a constant currency basis).
CEO Steve Easterbrook said:
Looking ahead, we are focused on growing global comparable sales and serving more customers while being mindful of the near-term challenges in several markets. We remain committed to driving long-term, profitable results while pursuing our goal of being recognized by our customers as a modern, progressive burger company.
The consensus estimates for the fourth quarter call for EPS of $1.41 on revenues of $5.96 billion. The current full-year 2016 forecast calls for EPS of $5.56 on $24.41 billion in revenue.
McDonald’s shares were up about 3.6% in premarket trading Friday morning to $114.52. The current 52-week range is $109.60 to $131.96. The 12-month consensus price target was $127.83 before the report.