McDonald's same-store sales beat expectations in the third quarter, proving that value promotions and a push towards healthier options and customisable premium burgers were beating back competition..
The world's largest fast food chain by revenue has been working to reverse lower traffic at its US restaurants, where it gets most of its profit, under pressure from Chipotle Mexican Grill and Panera Bread.
An overhaul in the past year has introduced fresh beef Quarter Pounders, premium customisable sandwiches such as the Signature Sriracha sandwich, as well as mobile ordering and delivery.
The company's quarterly results today showed global comparable sales rose 6%, beating the 4.5% increase expected by analysts.
Analysts said that given that the fast food and casual dining segments as a whole struggled over the third quarter, this is an encouraging set of results which suggests McDonald's is gaining both market and customer share.
Aggressive value promotions in the US included offering soft drinks of all sizes for $1, McCafe beverages such as smoothies and espresso drinks for $2, and the McPick 2 offer, which lets customers buy two menu items for $5.
The changes, part of a turnaround plan under chief executive Steve Easterbrook, come after Chipotle and other chains raised the bar on what ordinary consumers can expect from mass market fast-food outlets.
Fast-food rivals such as Wendy's and Burger King, also squeezed by the trend, have also been working hard to keep customers with different menus and deals.
Same-store sales - McDonald's US restaurants that have been open for at least 13 months - rose 4.1% in the quarter ended September, above the 3.4% growth expected on average by analysts polled by research firm Consensus Metrix.
Strong performance across markets such as China, the UK and Canada also helped the sales numbers and underlying profit.
Excluding items, McDonald's earned a profit of $1.76 per share, only just missing an average analyst estimate of $1.77 per share, according to Thomson Reuters.
Total revenue beat forecasts but overall was down 10.4% at $5.75 billion due to a step up in franchising of its restaurants which provides the company with less revenue but saves on costs.
Analysts were expecting revenue of $5.74 billion.
McDonald's chief financial officer Kevin Ozan said the company had completed refranchising of 4,000 restaurants in China and Hong Kong more than a year ahead of schedule.
