McDonald's stock spikes to new record after blockbuster Q1 earnings

McDonald's (MCD) hit a record high on Friday, fueled by a blockbuster fiscal first-quarter earnings report that topped Wall Street's expectations.

In intraday trading that saw stocks retreat despite blowout earnings from tech bellwethers, the Golden Arches vaulted as high as $236.10 per share before paring those gains. Investors cheered McDonald's quarterly results, which saw the fast food giant's sales return to pre-pandemic levels.

Same-store sales in the U.S. jumped by 13.6%, while overseas saw a comparatively softer 7.5% bounce, with lockdowns still in effect in other countries. Meanwhile, both earnings per share (EPS) and revenue topped market expectations.

Peter Saleh of BTIG, who has a "Buy" rating on shares of McDonald's and price target of $245, told Yahoo Finance that in the U.S., McDonald's has "the ability to really grow their sales tremendously." He added that the uptick was "a function of the drive-thru, digital experience and delivery."

Indeed, with most dining rooms still shuttered, digital and drive-through in the U.S. comprises the lion's share of their business. That outlook is less encouraging internationally, where they don't have as many drive-thru's," Saleh added.

In the report, McDonald's president and CEO Chris Kempczinski said the Golden Arches is "focused on doubling down on digital, drive-thru and delivery."

Also helping is a menu refresh that saw McDonald's join the battle of chicken sandwiches, which also led to a boost in foot traffic. In addition, digital-only deals like for a free McFlurry on the app on May 4th, is also drawing interest and cultivating loyalty.

McDonald's is also currently testing loyalty program in Phoenix and New England and expects to launch it later on this year. Saleh said it might be these exclusive, app-only deals that could help in this launch.

"If McDonald's wants to market heavily behind this program later on this summer, if it's the fall, I think they can likely drive a lot of sales and a lot of sign-ups to the loyalty program, which I think will benefit" the company, he added.

In fact, reward programs can pack a big punch in terms of repeat traffic, as a number of food chains have discovered. In recent research, Saleh found that reward customers at Starbucks (SBUX) visit 2 to 3 times more often than their non-rewards counterparts.

The company also shared a fairly bright outlook for 2021, it expects to spend more $1 billion dollars in the United States — allocating $500 million to modernize over 1,200 restaurants. Worldwide, the Golden Arches also plans to open more than 1,300 restaurants.

Brooke DiPalma is a producer and reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at [email protected].