McDonald’s’ recovery after sanctions were lifted in the United States, was so high in the first quarter that it exceeded sales from the same time in 2019, well before the pandemic hit the region. McDonald’s sales increased by 9% to $5.1 billion in the first quarter of this year, exceeding expectations. Last year at this time, shops across the world were shutting as the world sought refuge from rising COVID-19 infections, so an increase in revenue this year at the same period was anticipated.
In the January-March season, same-store sales, or sales at locations opened for at least a year, increased by 13.6 percent in the United States. There were fewer diners, and many of the restaurants remained closed. Those that did come ordered more, with many ordering food for the whole family rather than just one person. According to McDonald’s US President Joe Erlinger, a new wave of federal stimulus checks is likely to have increased first-quarter revenue. According to him, new items such as a long-awaited crispy chicken sandwich and spicy nuggets performed well. ”The optimism we saw in the first quarter extended well beyond the stimulus tests,” Erlinger said on a conference call with investors on Thursday.
Drive-thru windows, which are used in almost every supermarket in the United States, remain a strategic advantage. McDonald’s reported that drive-thru windows accounted for about 90% of its U.S. revenue in the first quarter, up from about 70% before the pandemic. The firm also made a number of updates to reduce drive-thru wait times, including a more straightforward menu. McDonald’s has seen a surge in demand for service, with 75 percent of its locations currently doing it. In comparison to in-store orders, delivery orders are typically bigger.
The challenge for McDonald’s would be to maintain the sales traction as more restaurants in the United States reopen and shoppers resume their pre-pandemic habits. According to CEO Chris Kempczinksi, the company’s experience in Australia and Japan shows that demand for drive-thru and distribution will remain high even as dining rooms reopen. According to CEO, a new reward scheme — which is currently being introduced in the United States and Germany — as well as celebrity meal offers could further fuel profits as the year progresses. On May 26, McDonald’s will release a meal partnership with the South Korean pop group BTS in 50 countries.
McDonald’s expects same-store revenues in the United States to exceed 2019 averages in the second quarter. Same-store revenues increased by 7.5 percent globally, exceeding analysts’ expectations of a 5% increase. According to the business, strong sales in China and Japan helped counter softness in France and Germany. Around half of Europe’s dining rooms are still closed, and drive-thrus are less common. According to Kempczinski, sales are also struggling in tourist-dependent markets such as Italy and Spain. McDonald’s is hoping that vaccination passports will help reopen travel in Europe this summer, according to CEO. The company’s net profits increased by 39% to $1.5 billion. According to FactSet’s survey of analysts, the firm received $1.92 per share after one-time items, comfortably topping Wall Street’s estimate of $1.81.
