Takeaways From McDonald's Investor Day

The Moat Gets Bigger

HUCK

I admit I am a sucker for Analyst Days. The more PDF pages the better!!! What I like about them is that they typically give significant details into the thinking and strategies of management. They also show operating metrics and financial goals that management focuses on.

While admittedly these presentations are typically the optimistic bull case on a company, I still find them useful to learn more about the company and typically I can find information that is useful to apply to analyzing other companies in the industry and occasionally other industries as well.

McDonald’s held an Analyst Day earlier this week. In this blog post I am going to save you 90 minutes of watching the presentation and just show what I consider the most insightful comments made by management. If you are invested in Arcos Dorados (the largest McDonald’s franchisee in Latin America), Yum! Brands, QSR or any of the pizza franchise companies, there is something here to takeaway and compare against their strategies. Even if you are invested in Darden or Texas Roadhouse or one of the other owner/operators, I think you will find McDonald’s commentary on the power of digital scale and loyalty programs insightful when analyzing these companies as well.

McDonald’s Competitive Advantages Due to Scale and Brand Power

Network Effects of Digital and Loyalty Programs Drive Incremental Sales

Lodging Loyalty Programs Size:

$MAR Bonvoy loyalty program. 192 million members. $HLT Honors membership more than 173 million members and remains the fastest growing hotel loyalty program. $H Turning to World of Hyatt, our loyalty program total membership to over 42 million.

Scale Drives Delivery/Pick Up Success

Other Tidbits

Summary

McDonald’s is one of the leaders in utilizing digital/loyalty programs to drive incremental sales and use Ai to analyze the data collected from these loyalty programs to increase personalization of offers and benefits to their members. Other companies, such as, Starbucks, Chipotle, Wingstop and Papa Johns also have large loyalty memberships and continue to outperform their peers as a result.

McDonald’s Analyst Day provided investors in the restaurant sector with a significant amount of data points that can be used to evaluate the strategies of other companies in the space. Perhaps understanding how MCD’s strategies are being used to drive outperformance, will allow investors to spot significant changes in other restaurant companies that could signal operational improvements and improved revenue and earnings trends.

Disclaimer

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