McDonald's Records Rise In Revenue For Three Month Period That Ended On June 30
McDonald's Corp has recorded a rise in revenue for the three month period that ended on June 30.
Global sales and profit for McDonald's Corp have surged past Wall Street targets as restaurants reopened despite staffing shortages and consumers lapped up a wildly popular celebrity meal inspired by South Korean pop band BTS.
The fast food chain also raised its guidance for fiscal 2021, saying a slightly quicker than expected recovery should lead to global system-wide sales growth in the mid- to high-teens versus mid-teens previously.
Same-store sales for the world's biggest fast-food chain jumped 40.5% in the second quarter and exceeded the pre-COVID-19 pandemic levels of 2019 for the second straight quarter. Analysts were expecting a 39.81% rise.
Uncertainty Due To The COVID-19 Pandemic
Shares were down more than 2.5% as McDonald's still sees business uncertainty due to COVID-19 pandemic-related stops and starts in markets around the world, especially as the Delta variant of COVID-19 spreads.
Even so, "people are venturing out and establishing new routines," McDonald's chief executive officer Chris Kempczinski said during a call with analysts.
Finding enough staff to power restaurants is also still "challenging" amid a wide labour shortage in the United States and Europe, he said.
That has slowed US drive-through service times by three seconds, but applications are increasing in US states that ended federal stimulus benefits, and wages are up by approximately 5%, he said.
Currently, approximately 70% of McDonald's US dining rooms are open, but Kempczinski said that nearly all should be open by the American Labor Day holiday in September.
Weathering The Impact From Lockdowns
Fast food chains have successfully weathered most of the impact from lockdowns, with drive-throughs, competitive pricing and a sharp focus on core menu items driving demand.
Factors Contributing To Sales
The Grammy-nominated boy band BTS's meal was launched by McDonald's in nearly 50 countries and includes chicken McNuggets, fries and two dips. It is also still seeing increased sales from the February launch of a line of new crispy chicken sandwiches. Besides fresh additions to its menu, McDonald's US sales jump was driven by larger order size and menu price increases, which helped it counter labor shortages and higher ingredient costs.
Comparable US sales rose 25.9% versus a year earlier and nearly 15% compared to 2019. Analysts were expecting 23.84% US sales growth, according to IBES data from Refinitiv.
Total revenue surged by a better-than-expected 57% to $5.89 billion during the three month period that ended on June 30, compared to a year ago when McDonald's posted a 30% drop due to coronavirus restrictions.
Net income more than quadrupled to $2.22 billion and excluding certain items, it earned $2.37 per share beating expectations of $2.11 per share.
Global App And Previous Expectations
The above news follows news from earlier this week that McDonald's Corp has said that it is bringing its digital, data analytics, marketing, restaurant development and operations segments into one unit as it focusses on driving growth through its global app and new MyMcDonald's Rewards programme, and McDonald's BTS celebrity meals and crispy chicken sandwiches were expected to fuel a US sales increase of 24% when the company reported is second-quarter earnings this week, but analysts were eyeing whether labour shortages could slow growth.