Global site navigation

Local editions

McDonald's profits rise as consumers seek value
Business and Economy

McDonald's profits rise as consumers seek value

by  AFP 2 min read
McDonald's scored broad-based sales growth as consumers sought value while contending with inflation
McDonald's scored broad-based sales growth as consumers sought value while contending with inflation. Photo: Yuki IWAMURA / AFP/File
Source: AFP

PAY ATTENTION: Donate to Legit Charity on Patreon. Your support matters!

McDonald's reported Tuesday a jump in fourth-quarter profits following higher sales in most markets, scoring with consumers worried about inflation.

The fast-food giant notched 12.6 percent comparable sales growth globally in the quarter ending December 31.

With the exception of China, where Covid-19 restrictions continued to depress sales, major markets including the United States, Japan and Germany all enjoyed solid growth.

"Overall we're still seeing the consumer is resilient and it plays to our strengths as a system in terms of being well positioned on value," Chief Executive Chris Kempczinski said on a call with analysts.

But Kempczinski said the company must stay "judicious" in terms of passing on higher operating costs to consumers.

Profits during the quarter were $1.9 billion, up 16 percent on the year-ago period on a one percent dip in revenues to $5.9 billion.

PAY ATTENTION: Follow us on Instagram - get the most important news directly in your favourite app!

Read also

GM profits rise after record quarter in North America

Cost pressures remained especially sharp in Europe, where the company is still working through "peak" inflation, in contrast to the United States, where cost pressures on food and paper materials have abated somewhat, said Chief Financial Officer Ian Frederick Borden.

Borden said prices in the United States rose about 10 percent over the course of 2022.

To assist its partners, especially in Europe, McDonald's plans $100 to $150 million in financial support in 2023 for franchisees, Borden said.

Back in its home market, McDonald's plans to open about 400 restaurants in 2023, the first additions in the United states since 2014.

The new US restaurants are "a sign of the confidence we have" in the business, said Kempczinski, who added that the US business has been boosted by higher digital and delivery sales.

In all, McDonald's plans 1,900 new stores globally, including about 900 new spots in China.

Shares of McDonald's fell 2.0 percent to $265.54 in afternoon trading.

While McDonald's results topped analyst estimates, Briefing.com said the chain's "cautious commentary on macro-related pressures" likely dented investor enthusiasm.

Source: AFP

Authors:
AFP avatar

AFP AFP text, photo, graphic, audio or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP news material may not be stored in whole or in part in a computer or otherwise except for personal and non-commercial use. AFP will not be held liable for any delays, inaccuracies, errors or omissions in any AFP news material or in transmission or delivery of all or any part thereof or for any damages whatsoever. As a newswire service, AFP does not obtain releases from subjects, individuals, groups or entities contained in its photographs, videos, graphics or quoted in its texts. Further, no clearance is obtained from the owners of any trademarks or copyrighted materials whose marks and materials are included in AFP material. Therefore you will be solely responsible for obtaining any and all necessary releases from whatever individuals and/or entities necessary for any uses of AFP material.

Hot: