McDonald's: International Markets Are 'Loving It' - McDonald's (NYSE:MCD)

Core Insights - McDonald's reported solid global comparable sales and loyalty momentum in Q3, but underlying growth slowed, and company-operated restaurant sales declined [1][2] Financial Performance - Adjusted earnings per share for Q3 were $3.22, missing the analyst consensus estimate of $3.33 [2] - Quarterly sales totaled $7.07 billion, below the expected $7.095 billion; consolidated revenues increased by 3% (1% in constant currencies) [2] - Revenues from franchised restaurants rose by 7% to $4.363 billion, while sales from company-owned restaurants fell by 3% to $2.563 billion [2][3] - Global comparable sales increased by 3.6%, with a 2.4% gain in the U.S. and a 4.3% increase in International Operated Markets [4] - Operating income rose to $3.357 billion from $3.188 billion year-over-year [4] Loyalty and Customer Engagement - Loyalty-member Systemwide sales across 60 markets reached approximately $34 billion over the last twelve months, with over $9 billion for the quarter [5] - The company emphasized delivering value, menu innovation, and effective marketing to drive customer traffic [5] Currency Impact - Systemwide sales and revenue were negatively impacted by the war in the Middle East, particularly in International Developmental Licensed Markets [6] - Favorable foreign currency translation added $151 million to total revenues and positively impacted diluted earnings per share by $0.04 [7] Future Outlook - McDonald's reaffirmed its 2025 outlook, expecting net restaurant unit expansion to contribute slightly more than 2% to Systemwide sales growth in constant currencies [8] - Projected capital expenditures for 2025 are between $3.0 billion and $3.2 billion, primarily for new restaurant expansions [8] - The company plans to open approximately 2,200 restaurants globally in 2025, including about 600 in the U.S. and International Operated Markets [9] - Expected free cash flow conversion rate is in the low-to-mid 80% range [9]