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McDonald's (MCD) Gains From Robust Comps & Expansion Efforts
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McDonald's Corporation (MCD - Free Report) is benefiting from robust comps growth, expansion efforts and loyalty program. Consequently, the company’s shares have gained 9.8% in the past year against the industry’s decline of 3.3%.
This Zacks Rank #3 (Hold) company has an impressive long-term earnings growth rate of 8.6%. The company’s earnings in 2022 and 2023 are likely to witness growth of 6.8% and 5.2% year over year, respectively.
Growth Drivers
The company continues to impress investors with robust comps growth. In third-quarter 2022, global comps advanced 9.5%, while a gain of 12.7% was reported in the prior-year quarter. This marked the seventh consecutive quarter of comps growth. In the third quarter, comps in the United States, international operated markets (IOM) and international developmental licensed (IDL) segment rose 6.1%, 8.5% and 16.7%, respectively. Japan and Latin America posted robust comps growth. The company reported comps growth for the 28th straight quarter in Japan.
McDonald’s believes that there is a huge opportunity to grow all its brands globally by expanding its presence in existing markets and entering new ones. Its expansion efforts continue to drive performance. Despite unfavorable scenario, the company continues to expand its global footprint. It is planning to open more than 1,800 restaurants globally in 2022, which includes 500 openings in the United States and IOM segment and 1,300 (including nearly 800 in China) inaugurations in the IDL market. The company expects restaurant growth of nearly 3.5% for 2022.
Image Source: Zacks Investment Research
Ever since the launch of loyalty program in the United States, McDonald’s has been able to transform its offerings across drive-thru, takeaway, delivery, curbside pick-up and dine-in. Apart from retaining the existing customer base, the program is also beneficial for expanding the same. The company has already introduced the loyalty program in more than 50 markets, including the United States, Germany, Canada, U.K. and Australia.
The company is also benefiting from robust digitalization. The company provides delivery in more than 100 countries. It has also reached new long-term strategic partnerships with Uber Eats and DoorDash for delivery. Over the past year, the delivery sales mix has doubled in Australia, Canada and the United States. The company has 25,000-plus drive-thru locations worldwide.
Key Picks
Some better-ranked stocks in the Zacks Retail – Restaurants industry are Wingstop Inc. (WING - Free Report) , Chuy's Holdings, Inc. (CHUY - Free Report) and Chipotle Mexican Grill, Inc. (CMG - Free Report) .
The Zacks Consensus Estimate for Wingstop’s 2023 sales and EPS suggests growth of 18.1% and 16.4%, respectively, from the comparable year-ago period’s levels.
Chuy’s Holdings currently carries a Zacks Rank #2 (Buy). CHUY has a trailing four-quarter earnings surprise of 18.6%, on average. Shares of CHUY have increased 7.4% in the past year.
The Zacks Consensus Estimate for Chuy’s Holdings’ 2023 sales and EPS suggests growth of 8.6% and 11.7%, respectively, from the corresponding year-ago period’s levels.
Chipotle currently carries a Zacks Rank #2. CMG has a trailing four-quarter earnings surprise of 4.1%, on average. The stock has declined 9.8% in the past year.
The Zacks Consensus Estimate for Chipotle’s 2022 sales and EPS suggests growth of 15.1% and 31%, respectively, from the corresponding year-ago period’s levels.
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McDonald's (MCD) Gains From Robust Comps & Expansion Efforts
McDonald's Corporation (MCD - Free Report) is benefiting from robust comps growth, expansion efforts and loyalty program. Consequently, the company’s shares have gained 9.8% in the past year against the industry’s decline of 3.3%.
This Zacks Rank #3 (Hold) company has an impressive long-term earnings growth rate of 8.6%. The company’s earnings in 2022 and 2023 are likely to witness growth of 6.8% and 5.2% year over year, respectively.
Growth Drivers
The company continues to impress investors with robust comps growth. In third-quarter 2022, global comps advanced 9.5%, while a gain of 12.7% was reported in the prior-year quarter. This marked the seventh consecutive quarter of comps growth. In the third quarter, comps in the United States, international operated markets (IOM) and international developmental licensed (IDL) segment rose 6.1%, 8.5% and 16.7%, respectively. Japan and Latin America posted robust comps growth. The company reported comps growth for the 28th straight quarter in Japan.
McDonald’s believes that there is a huge opportunity to grow all its brands globally by expanding its presence in existing markets and entering new ones. Its expansion efforts continue to drive performance. Despite unfavorable scenario, the company continues to expand its global footprint. It is planning to open more than 1,800 restaurants globally in 2022, which includes 500 openings in the United States and IOM segment and 1,300 (including nearly 800 in China) inaugurations in the IDL market. The company expects restaurant growth of nearly 3.5% for 2022.
Image Source: Zacks Investment Research
Ever since the launch of loyalty program in the United States, McDonald’s has been able to transform its offerings across drive-thru, takeaway, delivery, curbside pick-up and dine-in. Apart from retaining the existing customer base, the program is also beneficial for expanding the same. The company has already introduced the loyalty program in more than 50 markets, including the United States, Germany, Canada, U.K. and Australia.
The company is also benefiting from robust digitalization. The company provides delivery in more than 100 countries. It has also reached new long-term strategic partnerships with Uber Eats and DoorDash for delivery. Over the past year, the delivery sales mix has doubled in Australia, Canada and the United States. The company has 25,000-plus drive-thru locations worldwide.
Key Picks
Some better-ranked stocks in the Zacks Retail – Restaurants industry are Wingstop Inc. (WING - Free Report) , Chuy's Holdings, Inc. (CHUY - Free Report) and Chipotle Mexican Grill, Inc. (CMG - Free Report) .
Wingstop sports a Zacks Rank #1 (Strong Buy). WING has a long-term earnings growth rate of 11%. Shares of WING have declined 5.2% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Wingstop’s 2023 sales and EPS suggests growth of 18.1% and 16.4%, respectively, from the comparable year-ago period’s levels.
Chuy’s Holdings currently carries a Zacks Rank #2 (Buy). CHUY has a trailing four-quarter earnings surprise of 18.6%, on average. Shares of CHUY have increased 7.4% in the past year.
The Zacks Consensus Estimate for Chuy’s Holdings’ 2023 sales and EPS suggests growth of 8.6% and 11.7%, respectively, from the corresponding year-ago period’s levels.
Chipotle currently carries a Zacks Rank #2. CMG has a trailing four-quarter earnings surprise of 4.1%, on average. The stock has declined 9.8% in the past year.
The Zacks Consensus Estimate for Chipotle’s 2022 sales and EPS suggests growth of 15.1% and 31%, respectively, from the corresponding year-ago period’s levels.