McDonald’s (MCD) missed expectations on the top and bottom lines in the third quarter, the company reported on Tuesday, with results hurt by softer than expected domestic comparable sales amid intensifying competition in the fast food space.
After the figures were released, the company’s shares tumbled by nearly 4% in pre-market trade.
Here were the numbers for McDonald’s third quarter, compared to Bloomberg-compiled estimates:
Revenue: $5.43 billion vs. $5.49 billion expected
Earnings per share: $2.11 vs. $2.21 expected
U.S. same-store sales: +4.8% vs. +5.2% expected
International same-store sales: +5.9% vs. +5.7% expected
Despite missing expectations for domestic same-store sales growth, McDonald’s notched better-than-expected same-store sales growth abroad.
“Our third quarter performance was strong, and broad-based momentum continued with our 17th consecutive quarter of global comparable sales growth," McDonald's CEO Steve Easterbrook said in a statement. "Globally, our customers are rewarding our commitment of running better restaurants and executing our Velocity Growth Plan by visiting more often."
Competition in the fast-food industry has been high, as companies like Wendy’s (WEN) announced last month that it would be making yet another attempt to join the select group of fast-food restaurants offering up breakfast. Wendy’s said that it would be hiring an additional 20,000 workers for the early 2020 launch.
While breakfast is the most profitable day part for fast-food restaurants, it is also one of the most challenging.
In order to blunt the mounting challenges, McDonald’s has announced new partnerships with third-party aggregators during its third quarter, ramping up its availability on food delivery apps. McDonald’s has partnerships with DoorDash, Uber Eats (UBER) and Grubhub (GRUB).
After the recent plant-based meat hype in the U.S. following Beyond Meat’s (BYND) explosive IPO in early May, McDonald’s announced that it would be testing out Beyond Meat burgers in 28 Canadian stores in September.
In addition, McDonald’s has been aggressively investing in technology to advance its business this year. In March, the burger giant bought Dynamic Yield for $300 million, its biggest acquisition in more than 20 years.
The investment in Dynamic Yield will help McDonald’s create a personalized drive-thru menu for its customers for an enhanced ordering experience. Then in September, McDonald’s announced that it will be purchasing an early stage voiced-based tech company Apprente. The purchase was yet another attempt to use tech to create a better drive-thru experience for customers. Customers will soon be able to drive up to the drive-thru and speak to a voice-powered machine to place orders.
McDonald’s shares rose 20% in 2019 and were roughly in line with the S&P 500’s (^GSPC) 21% gain during the same time period.
The conference call with management will kick off at 11 a.m. ET.
This post is developing. Please check back for updates.
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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