© Reuters. FILE PHOTO: The McDonald’s company logo is seen on the front of a restaurant in London, Britain, December 10, 2021. REUTERS/May James
(Reuters) -McDonald’s Corp beat quarterly comparable sales estimates on Thursday, helped by higher menu prices and an increase in restaurant traffic from inflation-weary customers looking for value meals.
The company’s shares rose 2.2% to $262.30 in premarket trading.
Like other fast-food chains, McDonald’s (NYSE:) has been forced to raise prices of its burgers and fries to keep up with surging commodity costs, but its meals are still cheaper than eating out at dine-in restaurants keeping demand resilient even as consumer spending power gets crimped.
Visits to the burger chain’s U.S. restaurants increased 6.2% in September, outpacing traffic to the broader quick-service restaurant space which showed just a 0.8% increase, according to data from Placer.ai, a location analytics firm.
Chipotle Mexican Grill Inc (NYSE:) on Tuesday also beat quarterly sales and profit estimates as it passed on higher prices to customers.
McDonald’s global same-store sales increased 9.5% in the third quarter ended Sept. 30, compared with estimates for a 5.8% rise, according to IBES data from Refinitiv.
Comparable sales for McDonald’s in the United States, the company’s biggest market, rose 6.1% in the reported quarter helped by higher prices.
McDonald’s iconic Big Mac burger was selling for $5.15 in June, up from $4.93 a year earlier, according to the Economist magazine’s widely used index of prices.
Analysts have noted that an easing in gas prices also boosted third-quarter restaurant sales in the United States in general after a slowdown in June.
However, McDonald’s total revenue fell 5% to $5.87 billion in the reported quarter, due to the impact of a stronger dollar. That still beat estimates of $5.69 billion.
The company’s net income fell 8% to $1.98 billion, or $2.68 per share.
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