Tue, 21 Sep 2021

Strong quarter seen at McDonalds as post-lockdown sales rise

Robert Besser
02 Aug 2021, 04:26 GMT+10

CHICAGO, IL: Global sales and profits for McDonald's Corp surged past Wall Street targets on Wednesday, attributed to fresh additions to its menu-including the Grammy-nominated boy band BTS meal --- larger order sizes and menu price increases, which helped it counter labor shortages and higher costs of ingredients.

Same-store sales for the world's largest fast-food chain jumped 40.5 percent in the second quarter, surpassing the pre-pandemic levels of 2019 for the second straight quarter.

Even so, "people are venturing out and establishing new routines," chief executive officer Chris Kempczinski said during a call with analysts, adding that finding adequate staff was still "challenging" amid a wide labor shortage in the United States and Europe.

Currently, about 70 percent of McDonald's U.S. dining rooms are open, but Kempczinski said nearly all should be open by the Labor Day holiday in September.

Fast-food chains have successfully weathered most of the impact from lockdowns, with drive-thrus, competitive pricing and a sharp focus on core menu items driving demand.

Comparable U.S. sales rose 25.9 percent versus last year, and nearly 15 percent compared to 2019. Analysts were expecting 23.84 percent U.S. sales growth, according to IBES data from Refinitiv.

Total revenue surged by a better-than-expected 57 percent to $5.89 billion in the three months ended June 30, compared to a year ago when McDonald's posted a 30 percent drop due to coronavirus restrictions.

Net income more than quadrupled to $2.22 billion and, excluding certain items, earned $2.37 per share, beating expectations of $2.11 per share.

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