McInflation Prices Up

McInflation Prices Up

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  • McDonald's (MCD) posted strong Q4 earnings, Tuesday, with a net income of $1.9B, or $2.59/share, up from $1.64B, or $2.18/share, a year earlier. Net sales dropped 1% to $5.93B, but rose 5% after foreign currency adjustments. Domestic traffic increased for the second consecutive quarter and same-store sales globally rose 12.6%, driven by higher menu prices, guest counts, and marketing efforts.

  • McDonald's expects global comparable-store sales to rise 10.9% and U.S. comps to increase 5.9% in the upcoming year, and is accelerating new restaurant development. It plans to open 1,900 new restaurants in 2023, including 400 in the U.S. and international operated markets, with the rest opened by developmental licensees, and 100 more new net restaurants than initially expected for 2022.

Why it matters

Many consumers have cut back restaurant spending in response to inflation. But McDonald’s has largely benefitted from the change in consumer behavior since many have traded down from full-service restaurants to its Big Macs and McNuggets.


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