Food & Beverage

How K-pop and crispier chicken delivered a better-than-expected Q2 for McDonald's

A McDonald's Q2 meal promotion with South Korean boy band, BTS, helped the chain exceed analysts expectations around its quarterly financial results. (Photo: McDonald's)

July 28, 2021

Promotions tied to a South Korean boy band BTS, as well as a chicken sandwich launch were primary factors in McDonald's successful second-quarter financial performance, according to the QSR's earnings report released this morning, which managed to beat out analysts' estimate for the Chicago-based chain. The second quarter ended June 30.

Revenue surpassed analysts' expectations of $5.6 billion, coming in at $5.89 billion, while EPS bested the $2.11 expected by Wall Street to end up at $2.37, the report said. Net sales were up to $5.89 billion, exceeding analysts predictions of $5.6 billion.

Other key Q2 highlights include:

• Consolidated revenues increased 57% to $5,888 million.
• Systemwide sales increased 48% to $28,281 million.
• Consolidated operating income increased $1,730 million (including $98 million in strategic gains due mostly McDonald's Japan stock sale).
• Diluted earnings per share for the quarter was $2.95 ($2.37 excluding 48 cents-per-share in income tax benefits from a U.K. statutory income tax rate change).
• Net sales rose 57% to $5.89 billion, topping expectations of $5.6 billion.
• Global same-store sales jumped 40.5% from a year ago and 6.9% on a two-year basis.

The company said strong sales from its promotion with BTS, along with a newly launched crispy chicken sandwich and its popularity were key drivers of the Q2 success.

"Our performance is a continued demonstration of the broad-based strength and resiliency of our business as global comp sales in the second quarter increased nearly 7% over 2019. For 65 years, we've created iconic experiences for billions of people around the world. Along the way, we've always focused on following our customers' needs, finding the most convenient and engaging ways for them to enjoy McDonald's. It's clear that our next chapter will be driven by our leadership in digital," McDonald's President and CEO Chris Kempczinski, said in the release. "As we build on our momentum and embed our digital capabilities through the customer experience."

Earlier this week, McDonald's announced that it was building a customer experience team, led by Chief Customer Officer Manu Steijaert, who Kempczinski said would work to help the chain execute a smooth omnichannel experience that "our customers want and McDonald's can provide."

Interestingly, foot traffic analytics firm, Placer.ai, said its counts of actual physical visits to the chain show that count was also nearing pre-pandemic levels, in Q2 and by July 12, had actually surpassed pre-pandemic levels. Those counts, however, were still down 11.1% this June, compared to June 2019. By the week of July 12, visits were actually up 2.1% compared to the same week in 2019.

But, with the Centers for Disease Control and Prevention opting to reinstitute mask-wearing in many parts of the country, it remains to be seen whether that upward climb in in-store visits will continue for McDonald's or any other restaurant's in-store business.