A sign is posted in front of a McDonald’s restaurant on April 28, 2022 in San Leandro, California.
Justin Sullivan | Getty Images
McDonald’s on Tuesday said both higher prices and value items fueled stronger-than-expected U.S. same-store sales growth in the second quarter.
But chief executive Chris Kempczinski said the environment remained “challenging” as inflation and the war in Ukraine weighed on its quarterly results.
The company’s shares were almost unchanged in early trading.
Here’s what the company reported compared to what Wall Street expected, based on a survey of analysts by Refinitiv:
- Earnings per share: $2.55 adjusted vs. $2.47 expected
- Revenue: $5.72 billion vs. $5.81 billion expected
McDonald’s second-quarter net income came to $1.19 billion, or $1.60 per share, from $2.22 billion, or $2.95 per share, a year earlier. The company reported a $1.2 billion charge related to the sale of its Russian business because of the war in Ukraine.
Excluding that charge, a French tax settlement and other items, the fast-food giant earned $2.55 cents per share.
Net sales fell 3 percent to $5.72 billion, hurt in part by the closing of Russian and Ukrainian McDonald’s restaurants.
Global same-store sales rose 9.7% in the quarter, fueled by strong international growth. Russian locations were excluded from the company’s same-store sales calculations, but Ukrainian restaurants were included.
U.S. same-store sales rose 3.7% in the quarter, beating StreetAccount estimates of 2.8%. The company credits its strategic price increases and value propositions for its strong performance. Last quarter, McDonald’s executives said some low-income consumers were trading down to cheaper options in response to inflation.
The company’s international license-to-grow division saw its same-store sales rise 16% in the quarter. Same-store sales shrank in China as the government reimposed Covid restrictions, but growth in Brazil and Japan more than offset weak market performance.
McDonald’s International Market reported same-store sales growth of 13%, fueled by strong demand in France and Germany.
Read the full earnings report here.
McDonald’s ( MCD ) Q2 2022 earnings beat estimates
Source link McDonald’s ( MCD ) Q2 2022 earnings beat estimates