McDonald’s Just Had Its First Great Quarter in Two Years. The Turnaround Might Actually Be Working.


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McDonald’s has spent the better part of two years chasing a turnaround, but on Thursday the company finally had something to show for its efforts: increasing sales, all around the world. For the third quarter, McDonald’s reported positive comparable sales (those at stores in operation for at least 13 months) “across all segments.” Globally, comps bounced 4 percent after more than a year of flat or negative results. In the U.S., they added 0.9 percent after two straight years of decline. Heading into the fourth quarter, McDonald’s expects more positive comps across the board.

Needless to say, investors are excited, and who could blame them? After watching McDonald’s comparable sales fall not just every quarter but practically every month straight through June, anything else is a welcome change. McDonald’s stock jumped 7 percent in morning trading to around $110.  

Data from SEC. Chart by Alison Griswold.

In its earnings release, McDonald’s attributes the strong global results to finally regaining its footing in China after a tainted meat scandal last year. In the U.S., the company credits the rollout of a “premium buttermilk crispy chicken deluxe sandwich” as well as a return to “the classic recipe ingredients” for the Egg McMuffin. “I am encouraged by our operating performance for the quarter,” McDonald’s CEO Steve Easterbrook says in a statement. “I am confident in the fundamental strength of the McDonald’s System and our ability to drive initiatives that are focused on delivering the greatest benefit for our customer.”

Within a week of donning the chief executive hat earlier this year, Easterbrook mapped out his goal for McDonald’s to become a “modern, progressive burger company,” and he’s since stuck to it. McDonald’s is testing delivery with Postmates, bringing all-day breakfast to consumers across the U.S., and even giving some employees a raise. That’s a welcome change from Easterbrook’s predecessor, Don Thompson, whose grab bag of initiatives for the most part either went nowhere or failed spectacularly. (The list is too long to recap fully here, but highlights included a terrifying makeover of Ronald McDonald, a transparency campaign with TV personality Grant Imahara, a seriously misguided “Pay With Lovin’ ” promotion, and the tragicomic modification of the McDonald’s slogan to “Lovin’ Beats Hatin’. ”)

Under Easterbrook, the vision has been more coherent. “Third quarter marked an important step in the Company’s global turnaround,” he says. “While still in the early stages, we believe our turnaround plan is starting to generate the change needed to reposition McDonald’s as a modern, progressive burger company.”

Finally, everyone else has a reason to believe that too.