CHICAGO — A loyalty program has further accelerated digital sales at McDonald’s Corp.
“In our top six markets, digital sales, which include mobile app, kiosks and delivery, made up more than 30% of system-wide sales in the first quarter,” said Christopher J. Kempczinski, president and chief executive officer, in an April 28 earnings call. “This equates to nearly 60% growth over the past year.
“We did over $2 billion of digital sales in the US alone in the first quarter. One of the biggest drivers of our digital adoption is our global loyalty program, MyMcDonald's Rewards. It's helping us better meet our customers' needs as we build more authentic and personal relationships.”
Global comparable store sales for Chicago-based McDonald’s in the first quarter ended March 31 increased 12% when compared with the previous year’s first quarter. The increase was 3.5% in the United States.
“Higher average check, driven by strategic price increases, continued to be a significant growth driver and strong marketing campaigns across loyalty, value bundles, and our Crispy Chicken Sandwich delivered incremental sales and continued to drive digital adoption,” said Kevin M. Ozan, chief financial officer, of US comparable store sales.
Comparable store sales increases were 20% in the international-operated markets segment and 15% in the international developmental licensed markets segment.
“In the UK, our customers can now order delivery directly on the McDonald's app,” Mr. Kempczinski said. “We plan to expand that capability to the US, Canada and Australia later this year. This will let us better control the delivery experience for our most loyal customers and to learn from the data they share, ultimately about how we create more seamless, memorable and personalized experiences.”
McDonald’s net income in the quarter was $1.10 billion, equal to $1.48 per share on the common stock, a 28% decrease from $1.54 billion, or $2.05 per share, in the previous year’s first quarter. Revenues rose 11% to $5.67 billion. Pricing was up about 8% from the previous year’s first quarter.
“As expected, our company operating margins were hampered by significant commodity and labor inflation,” Mr. Ozan said. “Given macroeconomic conditions, we expect these elevated inflationary pressures to continue throughout this year.”
He added McDonald’s executives expect commodity prices to rise 12% to 14% for the fiscal year.McDonald’s stock price on the New York Stock Exchange closed at $254.19 per share April 28, up 2.9% from a close of $247.14 on April 27.