McDonald’s Corporation (NYSE:MCD) 3Q17 earnings were released before opening bell this morning. The fast food restaurant operator reported adjusted earnings of $1.76 per share on $5.76 billion in revenue, versus the consensus estimates suggesting earnings of $1.76 per share on $5.75 billion in sales. In last year’s third quarter, McDonald’s reported earnings of $1.62 per share on $6.4 billion in sales.
McDonald’s 3Q17 earnings
The company blamed its refranchising initiative for the 10% year-over-year decline in consolidated revenues.
On a GAAP basis, McDonald’s 3Q17 earnings rose 55% to $2.32 per share from $1.50 per share in last year’s third quarter. The fast food chain’s global comparable sales rose 6% on the back of guest count growth in all segments. Consensus had only been looking for a 4.6% increase in global comparable store sales. Systemwide sales grew 7% in constant currencies as comparable sales and restaurant expansion drove the growth.
U.S. comparable sales grew 4.1%, which the company attributed to its national beverage and McPick 2 promotions. The company’s Signature Crafted premium sandwiches also continued to be successful. International Lead comparable sales grew 5.7% year over year as the U.K. and Canada showed continued momentum and all other markets returned positive results.
Comparable sales in the High Growth segment grew 6.2% as China returned strong results and most of the rest of the segment also saw growth. Foundational market comparable sales grew 10.2% as all geographic regions returned positive sales performances.
McDonald’s refranchises China, Hong Kong segments
The fast food restaurant operator also refranchised its China and Hong Kong businesses during the third quarter, hitting its target of refranchising 4,000 restaurants over a year earlier than management had expected.
“Completing this transaction brings us closer to the customers and communities we serve in these markets and creates a better opportunity to unlock their full growth potential,” Chief Financial Officer Kevin Ozan said in a statement. “Our more heavily franchised structure will continue to drive shareholder value by providing a more stable revenue and income stream with higher returns on invested capital.”
McDonald’s returned $2.9 billion to shareholders through dividends and share buybacks. The company also increased its quarterly dividend to $1.01 starting in the fourth quarter.
Following the McDonald’s 3Q17 earnings release, the company’s stock ticked higher by as much as 0.4% to $164 in premarket trading.