McDonald's' Strong Growth: Shares Rise

McDonald's reported strong sales growth following its campaigns aimed at attracting challenged consumers on Wednesday. The company's shares gained value despite its profits falling short of expectations.

The restaurant chain faced a "bifurcated" consumer market, according to CEO Chris Kempczinski, which was addressed with the introduction of new "Extra Value Meals" in the United States in September.

Kempczinski said in a conference call with analysts, "We are continuing to be cautious about consumer health in the U.S. and our largest international markets, and we believe that the pressures will continue through 2026."

Third-quarter profits rose by 1% to $2.3 billion, while revenues increased by 3% to $7.1 billion.

The company began offering competitive-priced bundles in September; for example, the $8 Big Mac meal includes a medium soft drink and medium fries. In November, it plans to offer sausage and chicken-based bundles. McDonald's is also undertaking similar efforts in its leading international markets.

The campaigns led to a 2.4% increase in comparable sales in the U.S. for the third quarter, while global growth was recorded at 3.6%.

Kempczinski noted that these promotions strengthened McDonald's' image of providing "trusted value," while the continued inflation of beef and other key food items remains a challenge.

"All of this continues to put pressure on the industry," he said. "This is an environment you have to struggle with when you come out."

To support franchises for promotions, CFO Ian Borden stated that the company financed half of the promotional costs. For September, this amount was set at approximately $15 million, while he indicated that this cost is expected to be around $75 million in the fourth quarter.

McDonald's shares gained 2.8% in afternoon trading.