What’s going on?
McDonald’s posted strong quarterly earnings on Wednesday, but the fast food giant’s investors might not want to count their McChickens before they McHatch.
What does this mean?
Dadadadadaaa, McDonald’s was certainly lovin’ it: the company saw its sales grow by a better-than-expected 57% last quarter versus the same period last year. Stores in international markets benefited from fewer pandemic-related closures, while those in the US – all 14,000 of them – were boosted by both higher prices and its new, in-demand chicken sandwich.
These results are the latest sign that McDonald’s has emerged from a tough year stronger than ever. That’s mostly down to some deft pivoting: the firm invested heavily in expanding its online and mobile order capabilities during the pandemic, which drove digital orders in its top six markets up 70% this year compared to the same period in 2020 (tweet this). And McDonald’s has no intention of letting those sales slip, launching a loyalty program earlier this month that’s already attracted more than 12 million Americans.
Why should I care?
For markets: Sleep with one eye open.
Still, McDonald’s did have a couple of warnings for investors. For one thing, resurgent coronavirus cases are prompting new restrictions in some countries that could hurt this quarter’s sales. And for another, the company’s restaurants are battling with higher costs – for labour, food, and packaging – which could dent the its profits if it can’t offset them with higher prices.
Zooming out: Keep those vaccines coming.
There is some good news in the ongoing head-to-head with the pandemic, though: US pharmaceutical giant Pfizer – which sells one of the most widely used coronavirus vaccines – said it’s delivered more than 1 billion doses of the shot globally, and it’s expecting that to top 2 billion by the end of the year. That was enough to convince the company to increase its revenue forecast from the vaccine by nearly a third to a cool $33 billion.