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McDonalds (MCD) Long Thesis:
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CLASSIC #QUAD4 STOCK: Given McDonald's orientation towards a value proposition, sales are likely to benefit from trading down, while also being impacted the macro economy. McDonald's is strong Quad 4 stock and is currently well-positioned with solid execution around very sound fundamentals. Its core value-oriented customers are caught in an inflationary spiral that may require the company to pivot towards a more price value stance with some of the iconic brands which has worked well during previous difficult periods.
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DIGITALLY ENABLED GROWTH: MCD had been working hard over the past 5 years to become digitally enabled. Currently, MCD is seeing a 25% digital mix and is supported by discount promotions & daily deals to drive sales in this channel. MCD launched its loyalty program in July 2021 and saw 30 million members in the first six months. Currently, Sensor tower is showing 69MM active users, growing 7% YoY. Digital and loyalty represents its most significant digital driver over time.
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CURRENTLY BEST IN CLASS MARKETING: Depending on how you measure it, MCD spends over $1.5 billion on media, far surpassing its next closest competitor. Current marketing focuses on accentuating taste, affordability, family & brand trust, and repositioning has resulted in a better, slightly different perception of the brand over the last several years.
