McDonald’s Finally Catches A Break

mcdonalds final checks

In what’s likely to be the most surprising earnings report of the season, McDonald’s (MCD) seems to have finally broken out of its slump. In its third quarter results, saw growth in areas it hasn’t seen it in months. In fact, it’s this the first time the company has seen sales growth in all segments in two years. Here are the details:

Revenue of $6.62 billion, down 5.3% from last year, but beating analyst expectations by $210 million, or 3.2%.

Earnings per share came in at $1.40, beating the consensus estimate by $0.12, or 9.4%.

Comparable store sales grew 0.9% in the United States.

Comp sales grew 4.6% in International Lead Markets, which includes Australia, Canada, France, Germany and the United Kingdom.

Comp sales grew an astounding 8.9% in High-Growth Markets, including China, Poland, Italy, Russia, South Korea, Spain, Switzerland and the Netherlands.

Falling revenue was due mostly to foreign exchange, which took a 12% cut.

“Third quarter marked an important step in the Company’s global turnaround—the reorganization of our business from a geographically focused structure to business segments that combine markets with similar characteristics and opportunities for growth,” said new chief executive Steve Easterbrook is a release.

The turnaround is underway

When Easterbrook announced the company’s new turnaround plans, investors felt like it was a bit underwhelming. It seemed that the majority of the plan was based on restructuring the business, starting with refranchising 3,500 restaurants by the end of 2018.

The idea behind it was to “unleash more entrepreneurial spirit and more innovation across our system while bolstering what makes McDonald’s a formidable leader in the industry: our incredible network of dedicated franchisees.” But with many franchisees already feeling the squeeze of struggling sales, McDonald’s wage increase and all-day breakfast, putting more weight on their backs doesn’t seem like the best of ideas.