Is McDonald's Running out of Gas?

In 21Q2, McDonald's beat expectations across the board thanks in part to a successful launch of 3 new chicken sandwiches and a meal promotion with K-pop band BTS. Same-store sales increased +40% YoY and +7% on a 2-year basis, driven by larger order sizes and menu price increases. Shares of MCD are trading around +13% higher YTD, but have fallen ~4% lower from highs achieved earlier this month. Now investors are wondering: can McDonald's keep its sales growth momentum going? LikeFolio data suggests normalization in some key McDonald's metrics. Demand for its new chicken sandwich line-up remains elevated YoY but has tempered on a QoQ basis: -17%.

Digital-specific mentions (including delivery) have dropped -12% QoQ. Last quarter, we recorded an improvement of +5 points, so a shift in the rate of digital growth is palpable. When compared vs. peers, you can see McDonald's lagging the short-term buzz boost YUM is garnering, falling closer to QSR in the eyes of consumers.

Earlier this week, QSR (Burger King) posted a revenue miss as labor shortages weighed on sales. On the positive side, McDonald's DOES boast the largest total mention volume and the happiest customers vs. fast-food peers.