McDonald's Corp. saw its shares rise by 2.2% on Monday, reaching a one-month high and leading the list of premarket gainers on the Dow Jones Industrial Average following stronger-than-expected third quarter results. The company's CEO, Chris Kempczinski, credited this success to the macroeconomic environment and a customer-oriented strategy.
Despite facing nonrecurring restructuring costs, McDonald's net income rose to $2.32 billion, up from $1.98 billion last year. This exceeded the FactSet consensus of earnings per share (EPS) of $3.00. Revenue also saw a significant increase, jumping 14% to reach $6.69 billion, surpassing the FactSet consensus of $6.56 billion.
The company's same-store sales showed an overall growth of 8.8%, with U.S. sales rising by 8.1%. This outperformed the expected growth of 7.5%. The higher sales were attributed to strategic menu price increases that helped boost average check growth.
This positive performance comes despite McDonald's stock dropping 13.0% over the past three months and the Dow Jones Industrial Average losing 8.6% in the same period.
InvestingPro Insights
According to InvestingPro, McDonald's Corporation (NYSE:MCD) has a robust financial standing. The company has consistently raised its dividend for 48 consecutive years, indicating strong financial health and shareholder confidence. Moreover, 10 analysts have revised their earnings upwards for the upcoming period, suggesting optimism about the company's future performance. The company also operates with a high return on assets, demonstrating efficient use of its resources to generate profits.
In terms of real-time data, McDonald's has a market capitalization of $186.39 billion, indicating its substantial size and influence in the market. The company's P/E ratio stands at 23.37, which, relative to near-term earnings growth, suggests the stock is currently trading at a low P/E ratio. The company's revenue for the last twelve months as of Q2 2023 is $24.193 billion, reflecting a solid financial position.
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