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McDonald's revenue jumps 14% as Big Macs lure diners despite higher prices

This photo shows a McDonald's restaurant in Ridgeland, Miss., Wednesday, Feb. 14, 2018.
This photo shows a McDonald's restaurant in Ridgeland, Miss., Wednesday, Feb. 14, 2018. Copyright Rogelio V Solis/AP
Copyright Rogelio V Solis/AP
By AP
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McDonald's reported better-than-expected sales in the third quarter as popular promotions brought in customers despite higher US prices.

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Global same-store sales — or sales at locations open at least a year — rose 8.8% in the July-September period, the burger giant said on Monday. That was ahead of Wall Street's forecast of an 8% increase, according to analysts polled by FactSet.

In the US, same-store sales rose 8.1%. Price increases have weighed on customers. In July, McDonald's said customers with annual incomes of $45,000 (€42,000) or lower are spending less on each order. 

But the company also said it was seeing more higher-income customers in its stores, those going to McDonald's now, rather than spending money at sit-down restaurants.

McDonald's raised prices on some menu items in the US, but it also drew customers with promotions like a 50-cent double cheeseburger on National Cheeseburger Day in September. 

In the UK, the company offered discounts throughout August, including 60% off Big Macs or Chicken McNuggets.

The McSmart menu, launched earlier this year in Germany, lets customers build their own small value meals. CEO Chris Kempczinski said the deal helped Germany notch its tenth straight quarter of double-digit sales growth in the July-September period.

McDonald's revenue rose 14% to $6.69 billion, ahead of the $6.56 billion Wall Street forecast. McDonald's net income — which included a $26 million charge for a restructuring announced last spring — rose 17% to $2.3 billion.

The Chicago company earned $3.17 per share for the quarter, also beating Wall Street's forecast of $3.00.

Shares rose almost 3% before the opening bell on Monday.

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