Who Cares About Declining US Sales? The World Is McDonald’s McOyster

Revenue missed expectations, visits declined and US same-store sales fell year over year. None of that stopped Wall Street from woofing down a happy meal following McDonald’s latest earnings call.

Shares of the fast-food titan surged more than 6% on Wednesday following its third-quarter report, good for the stock’s largest single-day jump since April 2020. The skinny? The company still beat on earnings, in part because of success in metric system markets where the Quarter Pounder is known as a Royale with Cheese.

Supersize Me, Bitte

While same-store sales declined 0.2% stateside, they still increased 1.5% year-over-year overall for the company in the quarter due to strong international growth. Its international developmental licensed markets business, which includes the Chinese and Japanese markets, saw same-store sales growth of 4.2%. Its international operating division, which features markets including Australia and Germany, grew 1.4%.

Next for the company? CEO Chris Kempczinski told investors and analysts yesterday that the company intends to continue with its plans to reinvest in restaurants and facilities while supersizing its McValue menu:

• Shares of the company are now up more than 18% since it announced its “NEXT” turnaround plan in September, which is centered on flushing some $8.5 billion back to franchisees through 2036 to protect profitability amid remodeling and other upgrades.
• Kempczinski also said Wednesday that the company has launched a “mix and match” value meal program across 1,900 US locations in a bid to entice consumers amid stubborn inflation.

Where’s the Ribs? The Golden Arches have a few other blemishes, too. Last week, a US District Court judge in Chicago ruled that a class action lawsuit can move forward against the company in which plaintiffs allege McDonald’s misled consumers by calling its occasional menu item the McRib despite the sandwich not actually featuring rib meat. A more accurate name, according to McDonald’s own description of the item, would be McSeasoned Boneless Pork Meat, though that doesn’t quite have the same ring to it.