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McDonald's (MCD) Hit by Supply Constraint in the United Kingdom
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McDonald's Corporation (MCD - Free Report) is currently grappling with supply disruption due to shortage of truck drivers. Consequently, the company has removed milkshakes from its menu across all 1,250 of its British restaurants.
The company informed that its is facing scarcity of bottled drinks as well. Hence, McDonald’s issued the following statement, “Bottled drinks and milkshakes are temporarily unavailable in restaurants across England, Scotland and Wales.”
The supply issues have primarily stemmed from shortage of truck drivers as Britain’s exit from the European Union at the end of last year has made it tougher for bloc’s citizens to work in the U.K. The coronavirus pandemic further aggravated the issue. Britain is facing shortfall of around 100,000 drivers. In an effort to manage the current scenario, the U.K government has eased limitations on the drivers’ working hours.
Image Source: Zacks Investment Research
Stock Price Performance
In the past six months, the company’s shares have gained 15.3%, compared with the industry’s rally of 12.5%. Amid the coronavirus pandemic, the company has been focusing on drive-thru, delivery & take-away. Prior to the coronavirus crisis, drive-thru accounted for about two-thirds of all sales in the United States. Drive-thru now accounts for approximately 90% of sales. McDonald’s continues to roll out mobile order and pay, with a new curbside check-in option. To provide enhanced experience and convenience to customers, the company is increasingly focusing on delivery.
The company informed that more than 80% of its restaurants across 100 markets globally provide delivery. In the United States, 95% of its restaurants provide drive-thru facility. Over the past year, delivery sales mix has doubled in Australia, Canada and the United States. It announced that across its major six markets, digital sales crossed $10 billion or nearly 20% of system-wide sales in 2020. During first-half 2021, the company recorded approximately $8 billion in digital sales in its top six markets, reflecting growth of 70% compared with the prior year.
Some better-ranked stocks in the same space include Papa John's International, Inc. (PZZA - Free Report) , Jack in the Box Inc. (JACK - Free Report) and The Wendy's Company (WEN - Free Report) , each carrying a Zacks Rank #2 (Buy).
Papa John's 2021 earnings are expected to increase 122.9%.
Jack in the Box has a three-five year earnings per share growth rate of 17%.
Wendy's has a trailing four-quarter earnings surprise of 24.8%, on average.
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McDonald's (MCD) Hit by Supply Constraint in the United Kingdom
McDonald's Corporation (MCD - Free Report) is currently grappling with supply disruption due to shortage of truck drivers. Consequently, the company has removed milkshakes from its menu across all 1,250 of its British restaurants.
The company informed that its is facing scarcity of bottled drinks as well. Hence, McDonald’s issued the following statement, “Bottled drinks and milkshakes are temporarily unavailable in restaurants across England, Scotland and Wales.”
The supply issues have primarily stemmed from shortage of truck drivers as Britain’s exit from the European Union at the end of last year has made it tougher for bloc’s citizens to work in the U.K. The coronavirus pandemic further aggravated the issue. Britain is facing shortfall of around 100,000 drivers. In an effort to manage the current scenario, the U.K government has eased limitations on the drivers’ working hours.
Image Source: Zacks Investment Research
Stock Price Performance
In the past six months, the company’s shares have gained 15.3%, compared with the industry’s rally of 12.5%. Amid the coronavirus pandemic, the company has been focusing on drive-thru, delivery & take-away. Prior to the coronavirus crisis, drive-thru accounted for about two-thirds of all sales in the United States. Drive-thru now accounts for approximately 90% of sales. McDonald’s continues to roll out mobile order and pay, with a new curbside check-in option. To provide enhanced experience and convenience to customers, the company is increasingly focusing on delivery.
The company informed that more than 80% of its restaurants across 100 markets globally provide delivery. In the United States, 95% of its restaurants provide drive-thru facility. Over the past year, delivery sales mix has doubled in Australia, Canada and the United States. It announced that across its major six markets, digital sales crossed $10 billion or nearly 20% of system-wide sales in 2020. During first-half 2021, the company recorded approximately $8 billion in digital sales in its top six markets, reflecting growth of 70% compared with the prior year.
Zacks Rank & Key Picks
McDonald's currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the same space include Papa John's International, Inc. (PZZA - Free Report) , Jack in the Box Inc. (JACK - Free Report) and The Wendy's Company (WEN - Free Report) , each carrying a Zacks Rank #2 (Buy).
Papa John's 2021 earnings are expected to increase 122.9%.
Jack in the Box has a three-five year earnings per share growth rate of 17%.
Wendy's has a trailing four-quarter earnings surprise of 24.8%, on average.