After McDonald’s saw a strong second quarter with help from Grimace, a purple mascot, the company is delving deeper into its stable of commercialized characters.
The fast-food giant, known for Ronald McDonald and the Hamburglar, has found another McDonaldland figure inspiration for a new store format called CosMc’s.
The Chicago-chain said CosMc’s will be tested in limited markets starting early next year.
“CosMc’s is a small format concept with all the DNA of McDonald’s but its own unique personality. We look forward to providing more information about development plans and new format innovations at our Investor Day at the end of the year,” the company said in an emailed statement.
For those whose memory of McDonald’s trivia is rusty, the Fandom website had this description on the temporary character: “CosMc was an alien who wore a large space suit, and he talked like a surfer dude. He was featured in a series of McDonald’s commercials in 1980-1985 where he traded some items to Ronald McDonald, Grimace, and the Professor during their picnic.”
CEO Chris Kempczinski announced the concept, intended to help McDonald’s add locations, during an earnings call Thursday. But he released no details.
The announcement came as Kempczinski gave partial credit to a marketing campaign celebrating Grimace’s birthday for improving its second quarter performance.
Global same-store sales, or sales at stores open at least a year, rose nearly 12% in the April-June period compared with the same quarter last year. That handily beat Wall Street’s forecast of a 9.4% increase, according to analysts polled by FactSet.
Some of those gains may fade a bit in the second half of this year. The price increases that have helped fuel McDonald’s sales in recent quarters will moderate as inflation comes down, Chief Financial Officer Ian Borden said in the earnings call.
“We recognize that we’re operating in a challenging macro environment, where costs remain elevated, customers discretionary spending is limited and industry traffic is pressured,” Borden said.
The Grimace campaign, which featured a limited-time purple milkshake, took on a life of its own after fans posted videos of themselves drinking the milkshake and then ending up on the ground in a messy pool of purple, or having some sort of seemingly paranormal experience. One TikTok video showing a teen drinking one in his car and then disappearing in a milkshake explosion. That video garnered more than 5 million “likes.”
“Grimace has been everywhere the past few months. All over the news, and more than 3 billion views on TikTok,” Kempczinski said. “This viral phenomenon is yet another proof point of the power of marketing at McDonald’s today.”
But in other markets, McDonald’s tightened its belt to lure inflation-weary customers. Germany’s McSmart value menu, introduced earlier this year, proved so successful that the company recently unveiled a similar menu in the United Kingdom.
In the U.S., consumers remain largely resilient, Kempczinski said. McDonald’s is gaining a share of higher-income customers who are trading down from sit-down restaurants, he said. Customers with incomes of $45,000 or lower are spending less on each order but are coming in more often, he said.
“There is certainly concern with the US consumer that shows up in their sentiment but our business and our value positioning in the market has put us into a good position to be able to weather that and continue to drive the share gains that you’re seeing,” Kempczinski said.
The company reported revenue rose 14% to $6.5 billion. That was ahead of analyst expectations for $6.3 billion.
Same-store sales in the U.S. more than doubled, rising 10.3% in the quarter compared with a 3.7% rise a year earlier.
Net income nearly doubled to $2.3 billion for the quarter. Excluding one-time items, the company earned $3.17 per share, which beat analysts’ forecasts of $2.78.
Among those one-time items was an $18 million charge for restructuring costs. McDonald’s laid off corporate workers in early April to speed innovation and decision-making.
Contributing: The Associated Press
