Shares of McDonald's surged in the third quarter for the first time in years.
Rumors of McDonald’s death have been greatly exaggerated: the fast food behemoth has just floored the industry by posting its biggest quarterly earnings in a long time.
McDonald’s profit was $1.31 billion in the third quarter, which was up from $1.07 billion a year earlier — certainly a huge increase by any measure. Investors were made quite happy by this news, which was released as part of an earnings reports on Thursday, causing McDonald’s stock to jump. Total third quarter revenues were $6.62 billion, which beat estimates by more than $200 million.
And it’s not because of their famous hamburgers: the move to an all-day breakfast and more chicken offerings are fueling an impressive surge for McDonald’s, according to a Fortune report.
In a third quarter earnings call recently, CEO Steve Eastbrook said the company would be repositioning itself as a “modern, progressive burger company,” but most of their time was spent talking about all-day breakfast and chicken.
It’s an indication that McDonald’s knows that in order to keep other fast food chains from gobbling up its market share, it needs to expand beyond its typical burger and fries offerings. While that will always be the company’s mainstay, it doesn’t get new people coming through the doors.
Instead, McDonald’s is focusing more on providing consumers with choices, particularly healthy options. The company appears to recognize that perhaps America is finally becoming saturated with burgers, with an estimated 50,000 burger restaurants in the country, according to the report.
In particular, there is concern about the growing popularity of “better burgers,” such as those from Five Guys and Shake Shack. Even non-traditional outlets, like Olive Garden, are offering their own burgers.
At this point, McDonald’s believes when it comes to burgers, all that’s happening is fighting over market share — so it’s time to try newer options.