McDonald's (MCD) -) shares extended gains Monday following a better-than-expected third-quarter earnings report for the world's biggest restaurant chain.
McDonald's said diluted earnings for the three months ended in September were pegged at $3.19 a share, up 19% from the year-earlier period and firmly ahead of the Wall Street consensus forecast of $3 per share.
Group revenue rose 14% to $6.69 billion, again topping analysts' estimates of a $6.58 billion tally, with the overall tally blunted somewhat by the strength of the U.S. dollar.
McDonald's said same-store sales rose 8.8% for the period on a global basis, firmly ahead of Wall Street forecasts of 7.8%, while U.S. sales jumped 8.1%, powered by "strong average check growth driven by strategic menu price increases."
"With global systemwide sales growth of 11%, our third-quarter results reflect our position of strength as the industry leader," Chief Executive Chris Kempczinski said in a statement.
"The macroeconomic environment is unfolding in line with our expectations for the year, and we continued to deliver convenience and value for our customers."
"Thanks to the entire McDonald's System's outstanding execution of Accelerating the Arches, we remain confident in our future and the strategic direction of our business," he added.
Dow component McDonald's shares were marked 0.5% higher in early Monday trading following the earnings release to change hands at $256.51 each. The move trims the stock's six-month decline to around 13.8%.
Analysts had expected McDonald's to post 12.1% jump in revenue, helped in part by targeted ad campaigns and value-conscious diners still pinched by elevated inflation in the world's biggest economy.
That dynamic could be changing course in the final months of the year and beyond, however, with easing inflation and a resilient economy providing wider choices for restaurant-goers beyond its 13,400 U.S. locations.
That may have influenced the group to boost its annual fees for new franchisees, which Reuters reported would rise to 5% from 4% as part of its first increase in three decades.
Chief Financial Officer Ian Borden also told investors in July that menu prices would likely fall over the back half of the year, in line with softer inflation prospects.
Investors may also look for commentary on a lawsuit filed against the group over the depictions of its burgers, which the plaintiff alleged were misleading.
U.S. District Judge Hector Gonzalez dismissed the suit earlier this month, but a similar complaint against Restaurant Brands-owned Burger King (QSR) -) was given the right to go ahead by a federal judge in Miami in late August.
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