McDonald’s posted better-than-expected sales in the second quarter as dining rooms reopened and new chicken sandwiches generated customer traffic.
Revenue jumped 57% to nearly $ 5.9 billion in the April-June period. That topped Wall Street’s forecast by $ 5.6 billion, according to analysts polled by FactSet.
Global comparable store sales, or sales in stores open at least one year, increased 40.5% from the same period a year ago. It was an easy comparison; the second quarter of 2020 was the low point of the pandemic for McDonald’s, when closures closed stores and sales plunged 30%.
But even compared to 2019, a year before the pandemic hit the United States, same-store sales were 7% higher.
The reopening of dining rooms around the world has brought McDonald’s closer to what would be considered normal before the pandemic. The UK reopened dining halls in May, while France and Germany reopened them in June, McDonald’s said. In the United States, 70% of dining rooms are now open, and the company expects all to be open by Labor Day, barring a resurgence of the coronavirus.
“When the markets reopen, customer demand returns quickly,” CFO Kevin Ozan said on a conference call with investors on Wednesday.
There were still a few hiccups, such as a resurgence of COVID that limited operations at restaurants in southern China.
There has also been a resurgence of infections in parts of the United States, especially in places where more people are reluctant to get vaccinated.
New menu items, like the Crispy Chicken Sandwich in the US and McSpicy in Australia and the UK, boosted sales. A worldwide meal promotion with South Korean pop group BTS – the latest in a series that also included a meal from rapper Travis Scott – was also a huge success. CEO Chris Kempczinski said the company plans more celebrity ties, but also new ways to generate buzz around the brand.
âMy challenge for our marketing team here at McDonald’s is figuring out what the next big idea will be,â he said.
The company also increased prices 6% from a year ago to offset rising food and labor costs, which also boosted sales.
Attracting workers has been a challenge emerging from the pandemic in the United States as well as in Europe, where border restrictions have limited the supply of workers, Kempczinski said.
Like other national chains, McDonald’s has increased wages to attract workers. In May, McDonald’s announced that it would increase wages at its 650 U.S. stores to $ 15 an hour by 2024. Including franchise stores, McDonald’s wages have increased 5% this year, Kempczinski said. .
The company is seeing a growing number of job applications in the United States, especially in states like Florida and Missouri which ended improved unemployment benefits in June, Kempckinsi said. In other states, these benefits end in September.
“I think there is evidence that as the federal stimulus package rolls out you will see an improvement in the demand rate,” Kempczinski said.
Because it was so hard to find enough workers, the average ordering time took an extra 3 seconds, Kempczinski said, but he thinks it is a short-term problem. The company has actually improved uptime by 30 seconds over the past few years.
âThe gains have been too tough,â Kempczinski said.
The Chicago burger giant made a second quarter net profit of $ 2.2 billion. Adjusted for one-time items, the company earned $ 2.37 per share. It was well above the $ 2.11 forecast by Wall Street.