McDonald’s shares slip as competition heats up

The company reported on Tuesday that sales at US restaurants open at least 13 months grew 4.8% in the third quarter. Wall Street expected that figure to be closer to 5.2%, according to data from Refinitiv. In the previous quarter, that growth rate beat expectations with a 5.7% jump.

Shares dropped more than 3% on the news Tuesday.

Internationally, the chain fared better, posting 5.9% sales growth at stores open at least 13 months and beating expectations. Total revenue for the quarter grew to $5.43 billion, a 1% increase compared to last year, while net income fell about 2%.

To improve growth, McDonald’s (MCD)has been adding digital menu boards to stores, expanding delivery options and investing in AI tech for its drive-thrus, among other things. But when it comes to menu changes, the chain is playing it safe, bringing back seasonal favorites, like the McRib, and international items like the Stroopwafel McFlurry, for a limited time.

Meanwhile, its rivals are making big bets in breakfast and plant-based alternatives.

For instance, Wendy’s is adding breakfast to its menu, investing $20 million and adding about 20,000 employees for the initiative. Others, like Burger King, are exploring plant-based menu options. The Impossible Whopper is now available throughout the United States. And Dunkin (DNKN)‘ recently said it will make its Beyond Meat (BYND) breakfast sandwich nationally available next month after a successful test in New York City.
McDonald’s has plant-based options internationally and is testing a Beyond Burger in Canada, but has yet to test a meat substitute in the United States.

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Rachel Meadows

Rachel Meadows

Trending topics news writer who enjoys cooking, walking her dog and travel.

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