McDonald’s Corp. (NYSE: MCD) earnings continue to shine. The company reported second quarter earnings per share of $1.13 on revenues of $5.95 billion. That’s a 12% jump in profits and a 5.3% jump in revenues from the same period a year ago for MCD stock. Analysts were expecting McDonald’s earnings of $1.12 on sales of $5.92 billion.
Competitor Yum Brands Inc. (NYSE: YUM), owner of KFC, Pizza Hut, and Taco Bell, reported last week that it had earnings per share of $0.59 on revenues of $2.57 billion. Expectations for Yum were EPS of $0.55 on revenues of $2.54 billion. Ironically, and unfortunately, Yum raised its full-year EPS guidance from $2.39 to $2.43, which was lower than analysts’ estimates of $2.48. That disappointment sent the stock price lower by about 3%.
Sales at McDonald’s rose in all its geographic regions, with European sales gaining the most, 5.2%. Global sales overall increased by 4.8%. McDonald’s attributed the gain in Europe to strong sales in France, Russia, and the UK.
Operating income in the U.S. rose 7%, which the company attributed to new drinks, core menu favorites, and the value menu. Australia and China led the company’s operating income boost of 9% (in constant currency).
McDonald’s posted its quarterly gain in spite of a recall of
cadmium tainted glasses that the company sold for $2 as a tie-in with the latest ‘Shrek’ movie. The company moved quickly to stop selling the glasses and offered to buy back the ones it had sold for $3 each. A long, drawn-out argument with the Consumer Product Safety Commission would have kept the tainted glasses on the front page for some time, possibly keeping customers out of the stores. McDonald’s quick and decisive recall certainly contributed to its quarterly results.
The company did not offer new guidance, but the CEO did note that same-store sales were up 3.7% in the US for the second quarter and that gains in June match that figure. International same-store sales growth was stronger in the second quarter than it has been through June, but sales are still increasing.
McDonald’s shares are down about 1% in very early trading this morning after almost reaching its 52-week high of $71.84 yesterday. Shares of Yum! Brands have been stuck around this $41.00 price after its disappointing outlook.
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