McDonald's Sees a Turnaround

By Lauren R. Hartman, Product Development Editor

Jul 27, 2017

McDonald’s Corp., Oak Brook, Ill., announced it's experiencing a stronger second quarter in 2017, which supports management’s efforts to change lackluster sales with new initiatives designed to gain positive results for the world’s largest fast-food company.

"We're building a better McDonald's and more customers are noticing," said McDonald's president and CEO Steve Easterbrook. "Our relentless commitment to running great restaurants and keeping the customer at the center of everything we do is generating broad-based strength and momentum across our entire business. For the quarter, we delivered our strongest global comparable sales and guest count results in more than five years. We're now introducing our Velocity Growth Plan accelerators in more restaurants around the world, bringing meaningful benefits to more customers through digital, delivery and our experience of the future."

Second quarter results ended June 30 got a boost from upscale burgers and chicken sandwiches and discounted beverages. McDonald’s Corp.’s earnings rose 28 percent to $1,395.1 million, and increased in comparable sales, reflecting positive guest counts in all segments.

In the U.S., second-quarter same-store sales increased 3.9 percent, reflecting the company's national cold beverage value promotion and its launch of a Signature Crafted premium sandwich platform, according to the company, allowing diners to customize their sandwiches with different toppings. The sandwiches are priced between $5 and $7 each. The surge is also due to the national cold beverage value promotion, which offers soft drinks for $1.

Core strategies in the U.S. focus on building momentum as it executes strategies to enhance convenience, strengthen value and innovate around its menu items to attract more customers more often.

Comparable sales for the international lead segment increased 6.3 percent for the quarter, led by continued momentum in the U.K., strong performance in Canada and Germany and positive results across all other markets. The segment's operating income increased 8 percent (13 percent in constant currencies), fueled primarily by sales-driven improvements in franchised margin dollars.

McDonald's also reiterated that its focus is based on four pillars: menu innovation; store renovations; digital ordering; and delivery, in order to achieve sustained growth and attract more customers.

"Whilst we're encouraged by our results from the first half of 2017, we're not complacent," Easterbrook concluded. "Today, we're acting like a leadership brand, taking on new challenges and opportunities and moving with a greater sense of purpose and urgency. We're building on our momentum, leveraging our size and scale and executing with greater precision against our priorities to retain, regain and convert customers by giving them even more reasons to visit and enjoy McDonald's. I'm confident that we're on the right path to continue positively impacting sales, guest traffic and customer satisfaction as we work to bring the biggest benefit to the most people in the shortest possible time."

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