McDonald's posts better-than-expected sales as chicken strips, Minecraft meal drive traffic
The Chicago burger giant said Wednesday its revenue rose 5% to $6.8 billion in the April-June period. That was higher than the $6.7 billion Wall Street forecast, according analysts polled by FactSet.
Same-store sales, or sales at locations open at least a year, jumped nearly 4%. Analysts had predicted a 1% decline.
McDonald's shares rose 3% in premarket trading Wednesday.
It was a far different story than the first quarter, when U.S. and global same-store sales slumped and McDonald's said lower- and middle-income consumers were cutting back on fast food.
But a meal tied to 'A Minecraft Movie,' which was offered in 100 countries starting in April, drove customers back to stores. McDonald's said it sold out of its collectible figures in less than two weeks.
McDonald's new McCrispy chicken strips also boosted customer traffic after they were added to the menu in May.
Some rivals didn't fare as well in April-June period. Yum Brands, the parent company of KFC, Taco Bell and Pizza Hut, reported lower-than-expected revenue on Tuesday and said KFC's same-store sales dropped 5% in the U.S. And last month, Chipotle lowered its full-year same-store sales guidance after a disappointing second quarter that saw same-store sales fall 4%.
McDonald's net income rose 11% to $2.25 billion in the second quarter. Adjusted for restructuring charges and other one-time items, the company earned $3.14 per share. That was in line with Wall Street's forecast.
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Texas Roadhouse Why we own it: Texas Roadhouse is a fast-casual steak chain that offers quality food at an affordable price in a fun atmosphere, creating one of the more compelling value propositions for consumers in the full-service dining category. A substantial majority company's stores are company-owned stores, with only a small proportion as franchise locations. Competitors: Darden (Olive Garden, LongHorn Steakhouse), Brinker (Chili's and Maggiano's), Bloomin' Brands (Outback, Carrabbas Italian Grill, BonefishGrill) Portfolio weighting: 2.3% Most recent buy: April 9, 2025 Initiated: Feb. 4, 2025 Usually, strong traffic and comparable sales performance translate to operating leverage, margin expansion, and earnings per share growth. But out of the company's control is beef inflation. This headwind weighed on the second-quarter results and is expected to be even worse in the third quarter. 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The company buys back these franchised locations from time to time, and we generally think these are a good use of cash. Bringing franchised locations under the corporate umbrella gives the company more control over everything in its restaurants and typically leads to stronger operating results. As for cash returns to shareholders, the company bought back $9.8 million worth of stock in the quarter. That's a step down from the $50.2 million worth of shares repurchased in the first quarter. Guidance As mentioned earlier, Texas Roadhouse comparable sales at company-owned restaurants increased 5.3% year over year through the first five weeks of the third quarter. For 2025, management reaffirmed most of its outlook. It continues to expect positive comp sales growth, including the benefit of menu price actions. 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Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
