McDonald's (MCD) Q3 profits soar as global store sales grow

Highlights

• McDonald's consolidated revenue increased by 14% YoY to US$6.20 billion in the quarter.
  
  
• The net income jumped 22% YoY to US$2.15 billion from 1.76 billion in Q3, 2020.
  
  
• McDonald's US sales were up 9.6% YoY in the quarter, while global comparable sales rose 12.7%.

American fast-food company McDonald's Corp (NYSE: MCD) on Wednesday reported a third-quarter profit of US$2.15 billion, lifted by newer menu items like the crispy chicken burger and higher prices.

The company's same-store sales jumped 12.7% in the quarter, higher than Wall Street estimates of a 10.31% increase, according to Refinitiv data.

McDonald's CEO Chris Kempczinski said the results show the company's "unparalleled scale and agility" in driving sales and meeting customers' needs. In addition, Kempczinski said it reflects its robust growth plan that can push long-term sustainable growth for its stakeholders.

The restaurant chain benefitted from the easing of pandemic restrictions, a newer menu that included the crispy chicken sandwich, and a high-visibility sales campaign, "Famous Orders."

It launched a new loyalty program in the US while bumping up menu prices to deal with rising labor costs and food inflation. Its sales in the UK, Canada, and Japan also saw significant growth.

Third-Quarter Highlights

McDonald's consolidated revenue increased by 14% YoY to US$6.20 billion in the quarter, while the net income jumped 22% YoY to US$2.15 billion from 1.76 billion in Q3, 2020.

In the year-ago quarter, McDonald's total revenue was US$5.41 billion.

The company’s operating income was US$2.98 billion in the quarter compared to US$2.52 billion in the same period a year ago.

The adjusted earnings per share were US$2.76, above analysts’ estimates of US$2.46 per share.

McDonald's US sales were up 9.6% YoY in the quarter, while global comparable sales rose 12.7%.

International sales increased 13.9% year-over-year.

The company also announced the resumption of its share buyback program while declaring a 7% increase in its quarterly dividend to US$1.38 per share.

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Source: Pixabay.

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Stock Performance

The MCD stock was trading at US$243.00, up 2.78%, in the premarket at 8:57 am ET.

The stock gained more than 15% YTD.

Its 52-week highest and lowest prices were US$249.95 and US$202.73, respectively.

Further, its P/E ratio is 25.73, the forward P/E one-year ratio is 26.18, and the EPS is US$9.19. The annualized dividend is US$5.52. Its next ex-dividend date is Nov 30, 2021, and the pay date is Dec 15, 2021. McDonald's has a market cap of US$176.55 billion.

Also Read: Coca Cola (KO), Kraft Heinz (KHC) raise outlook after Q3 results

Bottomline

McDonald's experiment with a newer menu, coupled with its ability to make rapid changes with the emerging global covid situation, seemed to be proving successful. However, a persistent labor shortage and inflation might hamper its growth. Nevertheless, investors should evaluate the companies carefully before investing in the stock market.