Summary
McDonald's Corporation (MCD) reported a strong third quarter and first nine months of 2021, demonstrating significant recovery and growth following the challenges of 2020. Total revenues increased by 14% for the quarter and 24% for the nine months, driven by robust comparable sales growth across all segments: U.S., International Operated Markets, and International Developmental Licensed Markets. This growth was fueled by a combination of menu price increases, larger order sizes, effective marketing promotions, and continued expansion of digital channels, delivery, and drive-thru services. The company's strategic focus on 'Accelerating the Arches' continues to yield positive results, particularly with the 'MyMcDonald’s Rewards' loyalty program showing strong enrollment and engagement in the U.S. The heavily franchised business model continues to provide stable and predictable revenue streams, with franchised revenues seeing a substantial increase of 15% for the quarter and 25% for the nine months. The company also announced an increase in its quarterly cash dividend and the resumption of its share repurchase program, underscoring its confidence in future performance and commitment to returning capital to shareholders.
Financial Highlights
50 data points| Revenue | $6.20B |
| Cost of Revenue | $592.60M |
| Gross Profit | $5.61B |
| Operating Expenses | $3.21B |
| Operating Income | $2.99B |
| Interest Expense | $293.70M |
| Net Income | $2.15B |
| EPS (Basic) | $2.88 |
| EPS (Diluted) | $2.86 |
| Shares Outstanding (Basic) | 747.10M |
| Shares Outstanding (Diluted) | 752.60M |
Key Highlights
- 1Total revenues grew 14% year-over-year for the third quarter of 2021 and 24% for the first nine months, indicating strong top-line performance.
- 2Global comparable sales increased by 12.7% for the quarter and 18.8% for the nine months, driven by strong performance across all major segments.
- 3Diluted earnings per share (EPS) saw a significant increase of 22% for the quarter to $2.86 and 76% for the nine months to $7.86, reflecting improved profitability.
- 4The company's strategic initiatives, particularly in Digital, Delivery, and Drive-Thru (the '3 D's'), are contributing to growth, with digital channels accounting for over 20% of Systemwide sales in top markets.
- 5McDonald's resumed its share repurchase program and declared a 7% increase in its quarterly cash dividend, signaling financial strength and commitment to shareholder returns.
- 6Operating income increased by 18% for the quarter and 54% for the nine months, showcasing improved operational efficiency and profitability.
- 7The company anticipates full-year 2021 Systemwide sales growth in the high teens (in constant currencies) and expects to achieve a free cash flow conversion rate greater than 90%.