McDonald’s Corporation (MCD) beat analyst expectations for its second quarter 2018 results despite posting a 12% decrease in revenues. Consolidated revenues fell to $5.35 billion during the quarter, hurt by impacts from strategic re-franchising initiatives. Global comparable sales rose 4%, reflecting positive comp sales in all segments. Systemwide sales grew 5% in constant currencies.
Net income for the quarter rose 7% to $1.49 billion from the prior-year period. Diluted EPS improved 12% to $1.90, reflecting $0.09 per share of strategic restructuring charges. Adjusted diluted EPS grew 15% to $1.99 during the quarter. Earnings for the quarter benefited from an increase in sales-driven franchised margin dollars and a lower effective tax rate.
Sales at Company-owned restaurants fell 27% in the quarter while revenues from franchised restaurants increased 11%. The fast-food chain faced food poisoning issues during the quarter which led to a recall of salads at thousands of its restaurants across the nation.
In the US, comparable sales grew 2.6% driven by growth in average check resulting from product mix shifts and menu price increases. Comp sales in the International Lead segment rose 4.9%, reflecting positive results across all markets, mainly driven by the UK and France.
In the High Growth segment, comparable sales improved by 2.4%, led by strong performance in Italy and positive results across most of the segment. Comp sales in the Foundational markets rose 6.8%, reflecting positive sales performance across all geographic regions.
The company returned $2.5 billion to shareholders through share repurchases and dividends during the quarter.