McDonald's (NYSE:MCD) executives have been loving it. Their company has delivered 13 straight quarters of comparable-store sales growth, including a 4.2% gain in the third quarter.
In the United States comp sales grew by 2.4%. Customers spent more money, partially thanks to product mix shifts and partially thanks to an increase in prices. In the chain's international business same-store sales rose by 5.4%, "reflecting positive results across all markets, primarily driven by the U.K., Australia, and France," according to the earnings release.
Earnings per share for Q3 came in at $2.10, a year-over-year decrease of 9%. If, however, you exclude "the impact of the prior year gain and restructuring and impairment charges, which totaled $0.56 per share, diluted earnings per share increased 19%," the company explained.
It was a solid quarter that continued the company's momentum. CEO Steve Easterbrook explained and celebrated the results in his comments during the company's Q3 earnings call.
1. The future is now (mostly)
McDonald's has been transforming the look of its business with its Experience of the Future makeover. The change involves adding self-ordering kiosks to stores while modernizing them.
"The U.S. is maintaining an aggressive pace of modernizing restaurants, completing around 1,000 projects during the quarter," Easterbook said. "At our current pace, by the end of 2019, we expect to complete over 12,000 restaurants with our Experience of The Future initiative making this as the largest construction project in our history."
2. China is becoming a huge McDonald's market
It has been a year since McDonald's created the developmental license partnership that operated the company's locations in Mainland China and Hong Kong. Since then, the fast food company has been rapidly expanding in the country.
"We're moving rapidly with an ambitious expansion program to at least 2,000 new restaurants over five years," Easterbrook said. The company opened 375 new restaurants in 2018, and expects to open 400 next year.
"I was also impressed to see how well the team in China is operating in a highly competitive environment," the CEO added.
3. Food quality keeps improving
In the U.S., McDonald's has been steadily making changes to some of its menu items. This has included using fresh, rather than frozen, beef in its Quarter Pounders and removing artificial preservatives from its Chicken McNuggets.
Easterbrook also commented on another change that was made in Q3: "Our seven classic burgers in the U.S. now have no artificial preservatives, no added colors from artificial sources and still no artificial flavors," he said.
4. Delivery is growing
"We now offer delivery from over 15,000 restaurants representing substantial growth from the end of 2016," Easterbrook said. The chain has a global partnership with Uber Eats and expects to keep adding delivery locations throughout the year, bringing the U.S. total to 9,000.
"Customer satisfaction with McDelivery remains high," the CEO said. "Once they experience the convenience, many of them become our most loyal customers frequently reordering the delivery."
The change is going well
What Easterbook has made very clear is that McDonald's has done a good job managing a major transition. The company has made big changes to its menu, its technology, and its overall operations. There are a lot of ways that could have gone wrong, but the chain has deftly handled changes and successfully introduced them to its customers.