McDonald’s Q2 earnings beat analysts' expectations, as the fast-food giant posted $5.89B in revenue compared to the expected $5.6B. The company attributed its growth to a return to in-person dining among consumers, better-than-expected sales of its new chicken sandwich, and a well-publicized promotional partnership with Korean pop music group BTS.
- Earnings per share were $2.37 (adjusted), beating the estimated EPS of $2.11.
- U.S. same-store sales grew 25.9% on a quarterly basis.
- Sales in international markets including Australia, Canada, and major European countries like the U.K. and France, increased 75.1%, and 2.6% on a two-year basis.
- In the company's International Developmental Licensed Markets, including Brazil, Japan, and dozens of smaller countries, sales increased 32.3%, and 0.3% on a two-year basis.
- The much-publicized collaboration with K-Pop superstars Big Time Socialists has paid off, with the ‘BTS Meal’ selling well. McDonald’s has also begun selling BTS-branded merchandise and clothing as part of its promotion.
- In the July 28 earnings call with investors, CEO Chris Kempczinski quoted the title of a popular BTS song when he described their collaboration as “dynamite”.
- High revenue growth can be attributed to increased rates of vaccination and lower COVID-19 case numbers in recent months, although McDonald’s said it's keeping an eye on the Delta variant and the potential threat it poses to economic recovery and growth.
- Higher labor and supply chain costs have led to a 6% increase in menu prices from last year.
- Concerns about labor shortages in the U.S. food services industry have diminished in recent months, following a May announcement that workers at company-owned restaurants would receive a wage increase.
- Following competitors, McDonald’s launched a loyalty rewards program for customers this month. More than 12 million people have signed up to date.