McDonald's (NYSE:MCD) reported strong same-store sales growth globally (5.9%) and in the United States (4.8%). That's 17-straight quarters of global growth, although guest counts were down in the company's home market.
Comparable-store sales -- a valuable metric for all restaurant stocks -- give an overview of the chain's business, and at the moment it's clearly healthy. Going forward, however, it's important for investors to take a deeper dive and look at metrics that are less obvious. These three don't tell the entire story for the fast-food company, but they give you a much deeper picture.
1. Digital growth
For McDonald's, the customer relationship has moved beyond its restaurants. It can now leverage consumers who sign up for its app to drive deliveries, incentivize visits, and facilitate in-store order taking (which may lead to larger orders).
"With digital, we are working hard to fill customers' desire for simpler, smoother and more personal engagement over our digital platforms, including kiosks, drive-thrus, and our mobile app," said CEO Steve Easterbrook on the third-quarter earnings call. "Nowhere was the power of our emerging digital ecosystem more on display during the third quarter than in China. The market drove strong comp sales growth in part by delivering tangible members-only benefits to our digital community, which now stands at 100 million registered members."
Easterbrook also specifically noted that the chain benefits from "the halo effect of promoting delivery to our growing digital network."
2. Dynamic Yield deployment
McDonald's has more technology than just its app. It also has Dynamic Yield, which allows it to use machine learning to predict customers' orders. The technology is still in early days, but it's being deployed rapidly because it's working, according to Easterbrook.
"The business case is driving rapid adoption," he said. "Dynamic Yield technology is now in over 9,500 U.S. drive-thrus with full rollout in nearly every U.S. restaurant with an outdoor digital menu board expected by year-end, and we're just getting started."
As more locations get Dynamic Yield, sales per customer should increase. This is sort of the artificial intelligence version of asking, "Do you want fries with that?". The system essentially knows what you want based on the available data.
3. The growth of McDelivery
Delivery has become a key driver for the chain, and might be the best hope for future growth. There are a number of factors that go into measuring the success of the program, and Easterbrook broke them down. Customers, he noted, are placing 10 delivery orders per second on average across the globe.
"So while we're on this call, customers will likely place 36,000 McDelivery orders," he said. "For 2019, we expect delivery to drive $4 billion or roughly 4% of global systemwide sales. That's up from $1 billion just three years ago. And it's now available from about 23,000 McDonald's restaurants in over 80 countries."
That's about two-thirds of the chain's 37,000 locations worldwide. Delivery checks, he added, average twice as much as in-store orders.
A changing playing field
As you can see from the numbers above, even small growth in delivery can produce big numbers. That will be driven by app adoption and the increased rollout of delivery to more restaurants.
What should be clear to investors is that McDonald's has become a company with a much larger playing field. Yes, driving and maximizing store visits is important (and the app and Dynamic Yield help with that), but success will be measured by more than just the number of people who visit its locations.