McDonald’s Posts Biggest Global Sales Gain in Seven Years
Bloomberg
Jul 26, 2019
(Bloomberg) -- McDonald’s Corp. grew at a blistering pace
in the latest quarter, with the world’s biggest restaurant chain
reporting its best global sales rise since 2012 as new delivery
partnerships and investment in breakfast are proving to be the
right sauce.
* Same-store sales climbed 6.5% globally, bolstered by a 5.7%
rise in its critical home market. Both gains surpassed analyst
estimates compiled by Consensus Metrix.
Key Insights
* New breakfast items like donut sticks have helped McDonald’s
compete in a hyper-competitive U.S. fast-food market.
Discounting has also drawn in diners, with its two-for-$5 deals
especially resonating. Gordon Haskett analysts called the lack
of margin expansion the “lone knock” on the quarter.
* The positive report comes on the heels of a similarly strong
quarter for breakfast rival Starbucks Corp., signaling global
consumers are still looking for convenience and value at big-
name chains.
* McDonald’s is investing in delivery to help fuel sales,
especially in the U.S. market, and it’s working. This month, it
added provider DoorDash Inc. to its existing partnership with
Uber Eats. Going forward, there’s more room to grow delivery
internationally, with the U.S. now pretty well covered.
* Still, there are pressures ahead. The burger chain is facing
rising labor and commodity costs, which have already resulted in
some increased menu prices. International commodity prices will
be up 2.5% this year compared to last year because of rising
protein costs, the company said on a call, worse than the 2%
gain the company had been forecasting heading into the latest
quarter.