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Why McDonald's Corporation Stock Popped Today

By Steve Symington – Updated Jul 25, 2017 at 3:16PM

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Shares of the fast-food giant jumped following a strong quarterly report.

What happened

McDonald's Corporation (MCD -1.81%) stock gained 4.8% on Tuesday after the fast food juggernaut announced better-than-expected second-quarter 2017 results.

So what

Quarterly revenue declined 3.4% year over year to $6.05 billion, albeit primarily due to the impact of McDonald's strategic refranchising efforts. Systemwide sales rose 8% at constant currency, helped both by new locations and global comparable-restaurant sales growth of 6.6%. On the bottom line, net income rose 28% year over year to $1.395 billion, and net income per share increased 36% to $1.70. Earnings per share rose 19% (21% at constant currency) after adjusting for the impact of strategic expenses recognized in last year's second quarter.

Meanwhile, analysts' consensus estimates predicted McDonald's would report lower earnings of $1.62 per share on revenue of $5.96 billion.

McDonald's location in Curacao

Image source: McDonald's.

"We're building a better McDonald's and more customers are noticing," stated McDonald's CEO Steve Easterbrook. "Our relentless commitment to running great restaurants and keeping the customer at the center of everything we do is generating broad-based strength and momentum across our entire business."

Now what

Easterbrook also noted the company is introducing its "Velocity Growth Plan accelerators" -- including enhancements to digital capabilities, delivery, and the chain's "Experience of the Future" restaurant concept -- to more locations around the world, which should only serve to further accelerate its momentum in the coming quarters.

There was nothing not to like about McDonald's performance, so it's no surprise shares traded at a fresh 52-week high today, even if they ultimately finished the day with a smaller gain.

Steve Symington has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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