NEW YORK – McDonald’s says it’s setting itself up for future growth by investing now in advances like voice recognition ordering technology. But for some investors, the short-term financial pain is hard to swallow.
McDonald’s net income dropped 2% to $1.6 billion in the third quarter as it rapidly remodeled stores and expanded delivery. Quarterly earnings at the Chicago company were flat at $2.11 per share. Wall Street was looking for per-share earnings of $2.21, according to analysts polled by FactSet.
Third-quarter revenue was $5.4 billion, the company said Tuesday, just shy of Wall Street’s forecast of $5.49 billion.
The company’s shares fell 4% to $201.46 in mid-afternoon trading Tuesday.
Last month, McDonald’s acquired a Silicon Valley voice recognition startup called Apprente, with an eye toward using it to take orders at drive-thru windows. The company plans to build a Silicon Valley tech lab around that acquisition. Earlier this year it spent $300 million to buy Dynamic Yield, an Israeli startup that helps it provide customized recommendations at drivethru windows based on things like weather, restaurant traffic and customer order patterns.
McDonald’s President and CEO Steve Easterbrook said 9,500 U.S. drivethrus now have Dynamic Yield, as well as most drivethrus in Australia. He said average check size grows when customers use it. McDonald’s digital in-store kiosks also increase check size.