It has been about a month since the last earnings report for McDonald's (MCD Quick QuoteMCD - Free Report) . Shares have lost about 2.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is McDonald's due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

McDonald's Q2 Earnings and Revenues Beat Estimates

McDonald's reported second-quarter 2021 results, wherein both earnings and revenues handily beat the Zacks Consensus Estimate. It is to be noted that the top and bottom lines beat the consensus mark for two consecutive quarters.

Robust drive-thru presence and its investments in delivery and digital over the past few years have aided the company amid the ongoing crisis. Robust digitalization will continue to help it in driving long-term growth and capturing market share.

The company reported adjusted earnings of $2.37 per share, which surpassed the Zacks Consensus Estimate of $2.12. The bottom line also improved 259.1% year over year. Meanwhile, foreign currency translation had a positive impact of 13 cents per share on earnings for the quarter under review.

Revenues & Comps Discussion

For the second quarter, revenues of $5,887.9 million beat the Zacks Consensus Estimate of $5,629 million. The figure also rose 56.5% year over year. The top line benefited from an increase in global comparable sales.

At company-operated restaurants, revenues were $2,488.7 million, up 56.1% year over year. The same at franchise-operated restaurants came in at $3,306.2 million, up 58.3% year over year.

For the quarter, global comps advanced 40.5% against a decline of 23.9% in the prior-year quarter. This marks the second consecutive comps growth, after reporting a decline in the preceding four quarters.

Solid Comps Across Segments

U.S.: Comps at this segment rose 25.9% for the second quarter versus a decline of 8.7% in the prior-year period. The company’s comps for the quarter gained from robust average check growth backed by larger order size and menu price increases.

International Operated Markets: Comps at this segment grew 75.1% year over year against a decline of 41.4% in the year-ago quarter. This upside was driven by solid comparable sales in the U.K. and France as well as positive comparable sales across the entire segment.

International Developmental Licensed Segment: The segment’s comparable sales increased 32.3% for the second quarter. In the prior-year quarter, the segment’s comps declined 24.2%.

2021 Guidance

The company expects system-wide sales growth in mid-to-high teens (in constant currencies) for 2021. It also expects net restaurant unit growth to contribute 1% to 2021 system-wide sales growth.

Operating margin is expected in the low-to-mid 40% range. The company anticipates capital expenditure to be $2.3 billion, about half of which will be directed toward new unit expansion across the United States and International Operated Markets.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

VGM Scores

At this time, McDonald's has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise McDonald's has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.