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McDonald's (MCD) Boosts McDelivery With 2 New Partnerships

McDonald's (MCD) announces two strategic partnerships with DoorDash and Uber Eats in a bid to boost its delivery program.

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This story originally appeared on Zacks

McDonald's Corporation MCD has been making every effort to boost its McDelivery channel, which was first launched in 2017. The company announced two strategic partnerships with DoorDash and Uber Eats.

The company announced that the new agreements will benefit the company franchisees as it will help them in generating more profit and cash flow. Customers will be able to order directly via the McDonald’s app.

McDelivery provides delivery from more than 32,000 restaurants worldwide. Previously, the company reported that digital sales crossed $10 billion or nearly 20% of system-wide sales in 2020 across its major six markets. It recorded approximately $13 billion in digital sales in its top six markets on a year-to-date basis.

Amid the coronavirus pandemic, the company has been focusing on drive-thru, delivery & take-away. Prior to the coronavirus crisis, drive-thru accounted for about two-thirds of all sales in the United States. Despite reopening of dining rooms, the company stated that drive-thru sales in its top six markets continue to remain strong compared to the pre-pandemic level. The company has been testing automated order-taking in the drive-thru at several restaurants in the United States. McDonald’s continues to roll out mobile order and pay, with a new curbside check-in option.

We believe the aforementioned partnerships will help the company in driving sales. The company has been undertaking digital initiatives to serve customers better, with nearly all of its U.S. restaurants now utilizing digital menu boards. McDonald’s continues to roll out mobile order and pay with a new curbside check-in option.

- Zacks

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Price Performance

Shares of McDonald's have gained 20% in the past year, compared with the industry’s rally of 15.9%. Robust drive-thru presence, and its investments in delivery and digitization over the past few years have aided the company in countering the pandemic. Robust digitalization will help the company in driving long-term growth and capturing market share.

The Zacks Rank #3 (Hold) company has been benefiting from the launch of it loyalty program. The new loyalty program will not only help in retaining the existing customers but also help in expanding the customer base. The loyalty program is likely to drive sales and average checks. During the third-quarter 2021 conference call, the company announced that the launch of its loyalty program in the United States has surpassed expectations. In just a few months, the company has more than 1 million members enrolled with over 15 million active loyalty members earning rewards.

Key Restaurant Picks

Dave & Buster's Entertainment, Inc. PLAY, which has been benefiting from reopening initiatives, expanding vaccinations and excellent operational execution, sports a Zacks Rank #1 (Strong Buy). The company anticipates to sustain the momentum in the days ahead, backed by its strategic initiatives that include new menu, optimized marketing and technology investments.

Dave & Buster's has reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 201.8%. The company’s fiscal 2021 earnings is likely to witness growth of 147.7%. PLAY stock has gained 24% in the past three months. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kura Sushi USA, Inc. KRUS carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 15.6%, on average. Shares of the company have gained a whopping 114.2% in the past six months.

The Zacks Consensus Estimate for Kura Sushi’s current financial year sales and earnings per share suggests growth of 108% and 85.7%, respectively, from the year-ago period.

Del Taco Restaurants, Inc. TACO has a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 25.7%, on average. Shares of the company have gained 3.3% in the past three months.

The Zacks Consensus Estimate for Del Taco Restaurants’ current financial year sales and earnings per share suggests improvement of 7.2% and 33.3%, respectively, from the year-ago period.



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