$McDonald's(MCD)$ $S&P 500(.SPX)$
McDonald's Corporation operates and franchises McDonald's restaurants. The Company's restaurants serve a locally relevant menu of food and beverages. Its restaurants are owned and operated by independent local business owners. The Company's segments include United States (U.S.), International Operated Markets (IOM) and International Developmental Licensed Markets & Corporate (IDL). The U.S. segment focuses on Company's menu and offerings, as well as delivery and digital platforms. Its IOM segment includes its operations in markets, such as Australia, Canada, France and Germany. Its IDL segment includes its operations in markets, such as Latin America and Asia.
Strong customer loyalty. McDonald's (MCD:US) exceeded 4Q22 estimates with strong comparable sales and guest count growth globally. Comparable sales increased over 12% for the quarter, with double-digit growth across all segments. Digital systemwide sales in its top six markets exceeded US$7bn, representing more than 35% of their systemwide sales. For the full year, comparable sales grew by over 10%, with comparable guest counts rising 5%.
Technological and product innovation are the key to long term growth. Today, roughly 65% of McDonald's restaurants provide Drive-Thru capabilities. Together with its digital capabilities, McDonald's aims to deliver a simple, faster and more seamless customer experience. Across McDonald's top 6 markets, the Group have delivered digital sales exceeding 35% of its systemwide sales in FY22. Loyalty programs are now also available in more than 40 markets with over 30m members enrolled.
Steady EBITDA growth. McDonald’s EBITDA growth has been steady from 34.9% to 52.7% in the past 9 years. Its sales and margins are improving in the tough macro environment amid new strategy that focus on delivery, drive-thru and digitalisation. The Company is also adopting strategies to offset high inflationary pressure related to raw materials and wages.
Prolonged high inflation relating to raw materials and wages; economic turmoil in international markets; changes in consumer tastes towards QSR food; etc. Could derail its growth in the short run.
With positive comparable sales across all geographic segments, and resilient operating income growth, the Company had declared a 10% increase in quarterly cash dividend in Oct'22. Considering McDonald's resilience amidst tough macro environment and inflationary pressures, we stay positive on McDonald’s.
This may have long term potential but the market is really volatile at the moment. Can consider to dollar cost average.
Modify on 2023-03-18 14:55
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