McDonald's (MCD 0.33%) is scheduled to report first-quarter 2022 earnings before the markets open on Thursday, April 28. The restaurant brand has done an excellent job rebounding from pandemic-induced closures in 2020 that hurt sales.

McDonald's has meaningfully increased its digital presence, and the move is paying off. Consumers appreciate the added convenience and are demonstrating it with increased spending. As a result, the company reported record profits in fiscal 2021. That said, investors will be watching McDonald's Q1 earnings on Thursday to see if it can sustain the momentum. 

A group of people eating burgers and fries and drinking beverages.

Image source: Getty Images.

Digital sales are boosting McDonald's in several ways

In its fiscal year 2021, which ended on Dec. 31, McDonald's boosted revenue by 21% to $23.2 billion. To put that growth into context, consider that the company had not grown revenue by more than 2.1% in any single year in the previous decade. In fact, its compounded annual revenue growth in the last 10 years is negative 1.5%, including the 21% increase in 2021. The historical figures highlight just how impressive 2021 was for McDonald's.

Of course, it helped that economies were reopening throughout the year and consumers were eager to leave their homes and visit restaurants in person. That said, McDonald's performance in 2021 was fueled by continued growth in digital sales. The category made up 25% of total systemwide sales in its top six markets in the most recently completed year. Another way to look at it is consumers made $18 billion in McDonald's orders digitally -- a massive sum, to be sure. 

Note digital sales include those made through its mobile app, third-party delivery providers, and kiosks inside its restaurants. These all have in common that they don't require a cashier to take and input an order and then process payment. That feature has been a boon for McDonald's and its franchisees in the aftermath of the COVID-19 outbreak, when they struggled to attract and retain employees. From a consumer perspective, it reduces friction in the ordering process, adds convenience, and creates new opportunities to enjoy McDonald's that otherwise wouldn't exist. For instance, an individual who only picked up its food on the way home from work during the week can now order for delivery on weekends. 

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MCD EPS Diluted (TTM) data by YCharts

It's all coming together nicely for the company, which reported earnings per share of $10.04 in 2021, a 59.1% improvement from 2020 and the most in its history.

What this could mean for McDonald's investors

Analysts on Wall Street expect the company to report revenue of $5.59 billion and earnings per share of $2.17. If it meets those projections, it will represent increases of 11% and 13.02%, respectively, from the same period the year before.

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MCD data by YCharts

Fortunately for potential investors, the market is arguably late in recognizing McDonald's impressive operating performance. The stock is down 7% year to date, allowing long-term investors to capitalize on the step-change improvement in McDonald's that the digital boost provides. Barring a disaster in its Q1 earnings or guidance for the rest of the year, investors can feel good about adding McDonald's stock to their portfolios