Shares of McDonald's (NYSE:MCD) rose on Tuesday after the fast-food giant reported positive third-quarter results. Strong comparable sales growth helped push revenue and earnings above analyst expectations. The stock was up about 5.4% at 11:20 a.m. EDT.
McDonald's reported third-quarter revenue of $5.37 billion, down 6.7% year over year, but $80 million above the average analyst estimate. The revenue decline was due to the company's refranchising initiative, which reduced sales at company-operated stores.
Global comparable sales rose 4.2%, with 2.4% growth in the U.S., 5.4% growth in international lead markets, and 4.6% growth in high-growth markets. In the U.S., the average check size rose due to product mix shifts and menu price increases.
Earnings per share came in at $2.10, down from $2.32 in the prior-year period, but $0.11 higher than analysts were expecting. EPS would have grown by 19% year over year if one-time gains and expenses are excluded.
CEO Steve Easterbrook commented on the company's growth and initiatives:
In addition to achieving 13 consecutive quarters of positive global comparable sales, we have made substantial progress modernizing restaurants around the world, enhancing hospitality and elevating the experience for the millions of customers we serve every day.
Shares of McDonald's are just about flat year to date after Tuesday's rally, but the stock is up nearly 60% over the past three years. The company has been consistently growing comparable sales, a feat driven in part by digital initiatives. The company's mobile app offers coupons and online ordering, and a partnership with UberEATS allows customers to get their burgers and fries delivered.
The resilience of McDonald's against a backdrop of intense competition in the fast-food and fast-casual portions of the restaurant industry has given investors reason to bid up the stock.