Many Indicators Point to McDonald’s Bright Future


McDonald’s (NYSE:MCD) stock is benefiting from aggressive expansion, comp growth, menu innovation, and digitization. MCD shares have gained 8.9% in the last three months, outperforming the industry’s 6.2% growth.

The company has an exceptional long-term earnings growth rate of 8.6%. Our models project that MCD’s earnings and sales will climb 4.9% and 8% year on year in 2023, respectively.

Growth Factors

McDonald’s is focused on capitalizing on significant opportunities by expanding all of its brands globally. To drive performance, it continues to extend its footprint in existing and new areas.

Regardless of the adverse circumstances, MCD is expanding its global footprint. It intends to open around 1,900 restaurants worldwide by 2023. This comprises 400 positions in the United States and the IOM segment, as well as 1,500 (almost 900 in China) in the IDL market.

In constant currencies, management forecasts net restaurant unit additions to contribute almost 1.5% to systemwide sales growth in 2023.

The company’s excellent comp growth continues to surprise investors. Global comps climbed 12.6% in the first quarter of 2023, compared to 11.8% in the prior-year period. This is the seventh quarter in a row of comp increase.

Comps in the United States, internationally operated markets, and the international developmental licensed segment each increased by 12.6% in the first quarter. MCD benefited from strong success in Germany, the United Kingdom, France, Australia, and Canada. Comps profited from a menu pricing hike, increased guest counts, and marketing campaigns.

The continued digital and delivery expansion also contributed to the uptick. McDonald’s also benefits from a strong loyalty program. It has already launched a loyalty program in over 50 markets, including the United States, Germany, Canada, the United Kingdom, Australia, and France.

The corporation reported increased digital interaction in all markets. It reported increased visits and sales as a result of targeted loyalty messages, a robust portfolio of mobile app deals, and content offerings.

Digital sales (from the top six markets) increased 30% year on year to $7.5 billion in the first quarter of 2023. Notably, this accounted for over 40% of MCD’s overall revenues. Given the increase in digital use, the company is upbeat and expects the initiatives to grow revenue and average checks in the coming quarters.

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About the author: Stephanie Bédard-Châteauneuf has over four years of experience writing financial content for various websites. Over the years, Stephanie has covered various industries, with a primary focus on consumer stocks, cannabis stocks, tech stocks, and personal finance. She has an MBA in finance.