Factors setting the tone for McDonald’s third quarter results (MCD)

McDonald’s Company MCD should pay off third quarter 2021 results October 27, before the opening bell. In the last published quarter, the company made a surprise profit of 11.8%.

Q3 estimates

Zacks’ consensus estimate for third quarter earnings is set at $ 2.46 per share, indicating a 10.8% improvement over the previous year’s quarter. The consensus mark in revenue stands at $ 6,024 million, which suggests an 11.2% growth from the prior year quarter.

Factors to note

McDonald’s third quarter performance is expected to have benefited from its expansion efforts, robust digitization, loyalty program and growth in comps. The company took advantage of its drive-thru service. Previously, the company said that more than 80% of its restaurants in 100 markets around the world provide delivery. In the United States, 95% of its restaurants offer drive-through services. Over the past year, the delivery sales mix has doubled in Australia, Canada and the United States. In the first half of 2021, it recorded roughly $ 8 billion in digital sales across its top six markets, up 70% from last year.

After reporting dismal lineups in the past four quarters due to the coronavirus pandemic, the company reported robust lineups in Q1 and Q2 2021. The uptrend is expected to have continued in Q3. In the quarter to be released, global lineup rose 40.5% compared to a 23.9% drop in the previous year quarter.

Strong sales from corporate-operated restaurants and revenues from franchised restaurants may have boosted the company’s reportable quarter performance. Zacks’ consensus estimate for company-operated restaurant sales is $ 2,522 million, which indicates an improvement of 10.3% from the quarter last year. The consensus mark for franchise-operated restaurants is $ 3,389 million, suggesting an 11.3% growth from the previous year figure. However, dismal traffic may have weighed on the company’s performance in the third quarter.

McDonald’s Corporation Award and BPA Surprise

McDonald’s Corporation price-eps-surprise | McDonald’s Corporation quote

What the Zacks model reveals

Our proven model does not conclusively predict an increase in profits for McDonald’s this time around. The combination of a positive ESP on earnings and a Zacks # 1 (strong buy), 2 (buy) or 3 (hold) ranking increases the odds of beating the winnings.

You can discover the best stocks to buy or sell before they are flagged with our ESP Income Filter.

McDonald’s has an ESP on revenue of -0.25% and a Zacks # 3 rank. You can see The full list of today’s Zacks # 1 Rank stocks here.

Stocks on the verge of beating earnings estimates

Here are some actions of the Zacks Wholesale Retail space for investors to consider as our model shows these have the right mix of elements to show a beaten earnings this quarter:

The incorporated cheesecake factory CAKE has + 0.98% Revenue ESP and Zacks # 3 rank. You can see The full list of today’s Zacks # 1 Rank stocks here.

Five below, Inc. FIVE has + 3.90% Revenue ESP and Zacks # 3 rank.

Wingstop Inc. WING has an ESP of + 0.87% earnings and a Zacks # 3 rank.

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McDonald’s Corporation (MCD): Free Inventory Analysis Report

The Cheesecake Factory Incorporated (CAKE): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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