Market rallies on McDonald’s sales surprise

“McDonald’s sales are showing unexpected strength and investors are lovin’ it,” Keris Alison Lahiff reports for The Street. “Shares of the fast-food chain were the clear winner on markets Thursday, by far the largest contributor to the Dow Jones Industrial Average.”

“Mickey D’s sales in the U.S. rose in the third quarter for the first time in two years, proving that efforts to simplify its menu and improve locations had begun to have an impact on the topline. Domestic same-store sales rose 0.9%, triple expectations. If not for the stronger U.S. dollar, overall sales would have grown 7%,” Lahiff reports. “Its success was felt marketwide and gave the earnings season energy after a lackluster start. The S&P 500 added 1.7% on Thursday, the Dow was up 1.9% or 320 points, and the Nasdaq gained 1.7%.”

“AT&T added 2% after earnings bested estimates and revenue saw a double-digit percentage increase thanks to the completion of its DirecTV acquisition. Excluding merger costs, earnings of 74 cents a share topped forecasts by 6 cents. The telecom expects full-year earnings between $2.68 and $2.74 a share, above analysts’ estimates of $2.61,” Lahiff reports. “Google parent Alphabet rocketed 9% higher after reporting net income of $5.73 a share in its recent quarter, up from $3.98 a share. Adjusted earnings, excluding one-time charges, came in at $7.35 a share compared to estimates of $7.20 a share. Sales jumped 13% to $18.68 billion, driven by advertising revenue on its Google sites.”

“There were other earnings wins scattered throughout the markets on Thursday. In tech, Texas Instruments increased its sales outlook on greater focus on its analog chip business, and Citrix Systems raised its full-year outlook thanks to better operating margins, while eBay beat earnings estimates in a quarter which saw the successful spinoff of its PayPal business,” Lahiff reports. “That gave tech giants a pep in their step. Consumer tech stocks including Apple, Alphabet, Microsoft, Facebook, and Alibaba rallied, while the Technology SPDR ETF climbed 2.3%.”

Read more in the full article here.

MacDailyNews Take: Big Mac maker helps big Mac maker.

13 Comments

  1. This is complete BS…. Mickey Ds increases 0.9% and are hailed as heroes. Apple meets or beats ‘expectations’ and are ripped to pieces .

    Imagine if the press & pundits treated the MacDonalds news like they do Apple. Yeah sure your numbers were triple what we expected, BUT since you decreased menu items and consumer choice/selection, we feel your business model is unsustainable for future growth.

    or maybe

    This increase is a fluke, when broken down we see the disturbing trend of lowered Quarter Pounder sales ompared to last quarter…. A one time quarterly increase in kids meals doesn’t represent a viable long term culinary strategy.

    1. It’s not that McDonald’s is a “hero.” It is that sales at McDonald’s generally follow the quality of the economy. If sales are up at McDonald’s, that is generally good news for everybody.

    2. The stock market would completely crash if every company were treated like Apple. “Sell everything!” Then everyone who sold in time would have loads of cash, buying up sh!t and improving sales, then the upward trend in sales would cause the stock to crash even harder!

  2. “A one time quarterly increase in kids meals doesn’t represent a viable long term culinary strategy.”

    That makes sense. After all, NOTHING at MacDonald’s represents a viable long term culinary strategy.

  3. It has to be because of the popularity of their new, healthy menus. I know I go out of my way to score one of their mouth-watering salads, and I’m sure tens of other people do too /s

  4. MDN – “Big Mac maker helps big Mac maker.”

    I think they have it backwards. I’ve gone into McDonald’s many more times than I would have otherwise do to Apple Pay.

  5. I thought franchisees were having a hard time with the McD expanded menu and all-day breakfast?

    No prob if they have got past the learning curve, though they would have a hard time making money out of me – a visit maybe once every year or two.

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