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McDonald's (MCD) on Wednesday reported third quarter earnings results that topped Wall Street's expectations, boosted by strong sales growth across the board as customers were enticed by a range of new menu items, even amid a resurgence of COVID-19 cases worldwide.
Here's the Golden Arches reported, compared to Wall Street estimates , according to a Bloomberg consensus estimate:
Revenue: $6.20 billion versus $6.03 billion expected
Adj. earnings per share (EPS): $2.76 (excluding special items) versus $2.46 expected
U.S. same-store sales: 9.6% versus 8.16% expected
Global same-store sales: 12.7% versus 9.04% expected
"We continue to execute our strategic growth plan and run great restaurants so that we can drive long-term, sustainable growth for all of our stakeholders," McDonald's President and Chief Executive Officer, Chris Kempczinski said in a statement.
The restaurant chain's new growth strategy, including the three ‘D’s:’ digital, delivery and drive-thru, has boosted sales during the pandemic. The Golden Arches also cited customers shelling out on larger orders, even as soaring inflation puts upward pressure on prices.
For McDonald's, the digital boom that's lifted the fast-food industry during COVID-19 showed no signs of slowing down. MyMcDonald’s Rewards, which launched on July 8th this past summer, now has over 22 million active app users and over 12 million enrolled members of of July, according to Tower data.
The company noted it benefited from "strong menu and marketing promotions" like the Crispy Chicken sandwich and the Famous Orders platform.
McDonald's international operated markets saw same-store sales jump 13.9 percent, led by very strong comparable sales in the U.K., where extended COVID-19 lockdowns eased recently — followed by positive comparable sales in Canada, France and Germany (where restaurant locations saw "significantly fewer" pandemic-related closures). Australia saw weakened sales this quarter due to restrictions.
In international developmental license markets, McDonald's saw strong sales led by Japan and Latin America. However, strong growth was offset by a decline in sales in China due to a resurgence of COVID-19 cases.
The earnings report comes as the fast food giant makes headway with a "small operations test" of the McPlant in the U.S. beginning November 3rd and overseas in the U.K and Ireland, in addition to multiple sustainability efforts including a makeover of its iconic Happy Meal toys.
In an interview with Yahoo Finance, BITG analyst Peter Saleh noted that right now McDonald's needs to get its dining opens reopened to "alleviate some of the pressures off the drive-through before they launch" something like the McPlant. He sees this collaboration with Beyond Meat (BYND), if they do launch the McPlant in the U.S. in 2022, as a "substantial benefit" beyond a range of 200 million dollars in sales "if it's launched for a full-year." However, Saleh noted it is "still suspect" if the menu item will be a full-year offering or a limited-time offering.
Wedbush's Nick Seytan, who has an "outperform" rating on shares of McDonald's and a price target of $270", favored McDonald's in a recent note. Despite headwinds from food costs and labor, Setyan also expected "continued top line growth to result in EPS upside."
Meanwhile, Jon Tower of Wells Fargo, who has an "overweight" rating on shares of McDonald's and recently changed its price target from $269.00 to $276.00, noted loyalty and celebrity meals are among tops items on the menu for third-quarter earnings results.
Shares of McDonald's are up 10 percent year-to-date.
Brooke DiPalma is a producer and reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at firstname.lastname@example.org.