Updated menu, celeb collaborations, pump McDonald’s sales

McDonald’s U.S. sales roared back in the third quarter on new menu items and attention-grabbing celebrity collaborations.

With new choices like spicy chicken nuggets and a meal deal promotion with rapper Travis Scott, McDonald’s exceeded most projections for the quarter.

It wasn’t the same story outside of the U.S., where sales between July and September, failed to match last year’s levels, and McDonald’s warned that a resurgence of coronavirus cases in key markets like France, Germany and the United Kingdom could force dining room closures and other restrictions.

Infections in the U.S. have now begun to surge as well.

Johns Hopkins University’s coronavirus tracker reported more than 50.2 million COVID-19 cases globally as of Sunday. The U.S., with about 4% of the world’s population, represents almost a fifth of all reported cases.

McDonald’s same-store sales — or sales at locations open at least a year — jumped 4.6% in the U.S. Customer traffic fell, but when diners came, they spent more on larger group orders. Dinner was particularly strong, McDonald’s said, but other times of day were elevated as well.

The meal promotion with Scott, introduced in September, was the first time McDonald’s featured a celebrity’s name on its menu since a Michael Jordan-branded meal deal in 1992. For $6, customers could order Scott’s favourite meal: a Quarter Pounder, fries and a Sprite. Scott’s Cactus Jack brand also designed clothes for McDonald’s employees.

McDonald’s also got a lift from the September introduction of spicy McNuggets. It was the first time the company had introduced a new style since McNuggets debuted in 1983.

Globally, McDonald’s same-store sales fell 2.2%, with sales increases in Japan and Australia offset by declines in China, Europe and Latin America. Still, that was significantly better than the 24% drop the company saw in the second quarter.

Third quarter net income rose 10% to $1.8 billion. Earnings, adjusted for one-time items, were $2.22 per share.

That surpassed Wall Street’s expectations of $1.91 per share, according to analysts polled by FactSet.

Revenue fell 2% to $5.4 billion. That was in line with expectations.

Shares of the Chicago company jumped almost 4% before the opening bell Monday.

Dee-Ann Durbin, The Associated Press