Inflation-burdened diners, price increases help fuel strong Q4 for McDonald's
McDonald's saw increased sales in Q4 of last year, the fast food chain reported Tuesday, beating Wall Street's estimates even as inflation continues to plague U.S. consumers.
The company reported sales of $5.93 billion in its fourth quarter, or $2.59 per share, versus analysts' expectations of $5.68 billion, or $2.45 per share, per The Wall Street Journal. Global same-store sales for the period were also up 12.6 percent from a year earlier. Menu price increases and promotions — such as the Cactus Plant Flea Market Box (or the "adult Happy Meal," as some consumers described it) and the limited-time McRib promotion — helped drive the profit boost, the chain said.
Company executives expect rising prices to remain a drag on the restaurant's bottom line into 2023 — though on the consumer side, McDonald's has "largely benefitted" from inflation, which has pushed many diners to alter their habits and substitute a full-service restaurant experience with a trip to the drive-thru, CNBC notes. Indeed, the chain also enjoyed a traffic bump in 2022, it said Tuesday, "as its meals remained less expensive than many competitors, drawing low-income consumers," Reuters writes.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Looking ahead to the rest of the year, McDonald's growth plans are focused on new restaurant development and expansion, said CEO Chris Kempczinski, per the Journal. The company is also expecting to save money by altering its corporate staffing structure come the spring.
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Brigid Kennedy worked at The Week from 2021 to 2023 as a staff writer, junior editor and then story editor, with an interest in U.S. politics, the economy and the music industry.
-
Reddit IPO values social media site at $6.4 billion
Speed Read The company makes its public debut on the New York Stock Exchange
By Peter Weber, The Week US Published
-
Housing costs: the root of US economic malaise?
speed read Many voters are troubled by the housing affordability crisis
By Peter Weber, The Week US Published
-
Feds cap credit card late fees at $8
speed read The Consumer Financial Protection Bureau finalized a rule to save households an estimated $10 billion a year
By Peter Weber, The Week US Published
-
Immigration helped the US economy outpace peers
speed read The U.S. economy grew at an annualized rate of 3.2% last quarter
By Peter Weber, The Week US Published
-
Nigeria's economic woes: what went wrong for African nation
Under the radar President Tinubu is struggling to tackle soaring inflation after 'shock therapy' of ending fuel subsidies
By Richard Windsor, The Week UK Published
-
4-day workweek gets boost from UK study
Speed Read Following a six-month trial, the majority of participating British companies are still using the truncated schedule
By Peter Weber, The Week US Published
-
US sues to block Kroger-Albertsons merger
Speed Read The Federal Trade Commission sued to block the $24.6 billion merger between the grocery giants
By Peter Weber, The Week US Published
-
Nvidia sees historic stock rise on AI chips success
Speed Read U.S. chipmaker Nvidia achieved the biggest one-day increase in value of any company in history
By Peter Weber, The Week US Published