The US stock markets are currently in all-time high season, with McDonald’s being the latest entrant to this exclusive club. With McDonald’s stocks reaching $218.15 yesterday morning, the company now holds a market capitalization of just over $165 billion. In terms of its yearly performance to date, this represents a 2019 increase of 20%.
The all-time high was in direct response to the fast-food chain’s quarterly report. Within it, the company announced revenues of $5.34 billion, which just exceed expectations of $5.3 billion. Moreover, global same-store revenue growth pitched in at 6.5%, smashing through the 5.15% market expectation.
In-store promotions continue to drive sales
McDonald’s put the better-than-expected quarterly figures down to its ongoing focus on in-store promotional deals. At the forefront of this has been the company’s ‘2 for $5 – Mix and Match’ promotion. This was especially successful in the US, with stores seeing growth of 5.7% during the quarter, once again beating market expectations of 4.5%.
The fast-food chain also made reference to ongoing growth of its core product line. Notably, this includes Quarter Pounders and Big Macs. Moreover, as per its recently renewed partnership with Disney, the company saw significant growth on its Happy Meal line.
In order to spear-head revenue growth on home soil, McDonald’s notes that is plans to inject surplus of $1 billion to modernize US stores. This will include an increase in the number of self-service kiosks, and renovation across more than 2,000 locations.
Outside of the US market, the quarterly update also noted that the company is experiencing good growth in Europe. Based on stores that have been operating for at least one year, the company noted quarterly growth of 6.6%, with much of this driven by the German and UK markets.
McDonald’s continues to push technology innovation
Outside of its core product range, McDonald’s also has a vested interest in a number of technology investments. For example, the company recently purchased Dynamic Yield – a firm that specializes in the development of machine learning.
This has been especially useful for the fast-food chain’s drive-through stores, with machine’s recommending menu items based on a number of key metrics, such as the weather and time of day. With McDonald’s experiencing a month-on-month increase in drive-through usage, it aims to have the machine learning technology installed at more than 8,000 stores across the US by the end of the month.
On top of its machine learning venture, McDonald’s is also looking to expand on its delivery service endeavours. While the company previously held an exclusivity deal with UberEats, this has since been revoked to allow for the inclusion of other delivery partners. In fact, the company added DoorDash earlier in July, further highlighting its grand ambitions to roll out its delivery service country-wide.
Efficiency levels are on the rise
Finally, stock brokers have also made reference to the company’s ongoing efficiency schemes. For example, it has instructed franchise owners that they are no longer required to offer loss-making all day breakfast deals, as well as discontinuing its rather stagnant premium burger range. Moreover, the fast-food chain has also reduced its late-night menu by a considerable amount.