McDonald’s sales soar on higher prices, newer menu items
October 27, 2021
(Reuters) -McDonald’s Corp reported quarterly U.S. sales on Wednesday that beat Wall Street expectations, helped by higher prices, larger order sizes and newer menu items such as the crispy chicken burger.
The company’s shares rose 3% to $243.30 in premarket trading, as the fast food giant’s global same-store sales jumped 12.7% in the third quarter ended Sept. 30, compared with estimates of a 10.31% rise, according to Refinitiv IBES data.
With pandemic-related restrictions easing and restaurants opening at full capacity, McDonald’s has been gaining market share from competitors by investing in new menu items such as the crispy chicken sandwich and its “Famous Orders” campaign with pop stars including South Korean boy band BTS and rapper Saweetie.
The company, which has been seeking to grow sales digitally, launched a new loyalty program in the United States, while also doubling down on advertising.
The upbeat results from McDonald’s is in contrast to some other restaurant chains such as Domino’s Pizza Inc and Burger King-owner Restaurant Brands International Inc that flagged a slowdown due to the tight labor market.
Several food service chains, including McDonald’s, have had to bump up menu prices to counter rising labor costs and food inflation.
Comparable sales for McDonald’s in the U.S. rose 9.6% in the reported quarter, and was higher than expected, which the company attributed in part to increased menu prices and customers buying more items per order.
Most of the company’s international markets also returned to sales growth, especially the UK, Canada and Japan, as coronavirus-related restrictions eased, while Australia and China sales continued to be pressured due to the resurgence of COVID-19 cases.
McDonald’s total revenue increased 14% to $6.20 billion in the reported quarter, beating expectations of $6.03 billion.
Net income rose 22% to $2.15 billion and the company earned $2.76 per share on an adjusted basis, beating estimates of $2.46 per share.
(Reporting by Aishwarya Venugopal in Bengaluru and Hilary Russ in New York; Editing by Shounak Dasgupta)