MCD McDonalds Corp

By Allison Prang 

Profit and revenue declined at McDonald's Corp. in the third quarter but same-store sales rose more than expected as the fast-food chain tries to lure people by changing up its burgers.

McDonald's same-store sales rose 4.2% world-wide, the company said. Analysts polled by Consensus Metrix were expecting same-stores sales to increase 3.7%. The U.S. saw the slowest growth rate, though it was still positive at 2.4%.

Revenue fell 6.7% from the comparable quarter a year ago to $5.37 billion, but that beat analysts' estimates. McDonald's said in a supplemental filing with the Securities and Exchange Commission that comparable sales increase in the U.S. was offset by its refranchising efforts. The company has spent the past few years moving its business model toward more franchises, saying it gives the company a more stable and predictable revenue stream.

McDonald's has tried recently to boost its sales by improving the quality of its products. For instance, it has cut back on preservatives in its burgers and moved to make its quarter-pounders with fresh beef.

About a quarter of McDonald's franchisees met earlier this month to talk about their concerns over sales. The group agreed to organize an independent operators' association.

In its supplemental filing, McDonald's said it expects a net addition of about 600 locations in 2018. The company also expects to have about $2.5 billion in capital expenditures for the year. Of that amount, $1.6 billion will be for the U.S.

The company's third-quarter profit fell 13% to $1.64 billion. It said earnings were $2.10 a share, down from $2.32 a share, but still beating estimates.

Shares of McDonald's climbed 2.3% in premarket trading.

Write to Allison Prang at allison.prang@wsj.com

(END) Dow Jones Newswires

October 23, 2018 09:13 ET (13:13 GMT)

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