McDonald's Records Global Comparable Sales Growth Of 7.5% And 9% Rise In Revenue For First Quarter Of 2021
McDonald's Corp has recorded global comparable sales growth of 7.5% and a 9% rise in revenue for the first quarter of 2021.
Wall Street Estimates For Comparable Sales
McDonald's beat Wall Street estimates for comparable sales, and said that it returned to pre-pandemic levels of growth, driven by eased COVID-19 restrictions in some markets and US customers, flush with stimulus cash, craving new chicken sandwiches and nuggets.
Surpassed Pre-COVID-19 Pandemic 2019 Levels
The first quarter global comparable sales growth of 7.5% surpassed pre-COVID-19 pandemic 2019 levels, McDonald's CEO Chris Kempczinski said. That trounced the 4.71% growth expected by analysts polled by Refinitiv IBES.
2021 System-Wide Sales Outlook
The Chicago-based burger chain also raised its 2021 system-wide sales outlook to the mid-teens from the low double-digits.
Vaccination Drive And Coronavirus Relief Checks
An intense vaccination drive and the distribution of coronavirus relief checks encouraged more people in the US to eat out.
"Seeing Continued Momentum"
"The stimulus checks are now wearing off generally, but we're seeing continued momentum in our business," Kempczinski said during a call with analysts.
Factors That Helped Sales Jump
Fast-food chains have managed to weather pandemic restrictions much better than others in the industry, given their drive-throughs, delivery networks and competitive pricing.
McDonald's also rolled out its crispy chicken sandwiches earlier this year in the US, looking to tap into a frenzy kicked off by privately owned Chick-fil-A and Restaurant Brands International Inc's Popeyes in 2019. It also brought back spicy chicken nuggets.
Those factors, combined with celebrity marketing campaigns, helped power a 13.6% jump in sales at restaurants open for more than a year, trouncing expectations of 9.25%, according to the analysts.
Sales were driven in part by higher tabs, with traffic lower across all segments.
Strong Growth In International Markets
McDonald's also showed strong growth in its international markets, with Britain, Australia and Canada recording rises in sales.
However, COVID-19 resurgences in some markets led to volatility and new government restrictions, particularly in France and Germany.
The company said that it had 40 million active users of its digital app in its top six markets, with approximately half of them being in the US.
Net Income Figures
Net income rose to $1.54 billion, or $2.05 per share, during the first quarter from $1.11 billion, or $1.47 per share, a year earlier.
Revenue rose by 9% to $5.12 billion, which was above estimates of $5.03 billion.
Earning Per Share
Excluding one-time items, the company earned $1.92 per share, which was well above the expectation of $1.81.