A sign is placed in front of a McDonald’s restaurant in San Leandro, California on April 28, 2022.
Justin Sullivan | Good pictures
McDonald’s Both higher prices and value items on Tuesday fueled U.S. same-store sales growth, which was stronger than expected in its second quarter.
However, CEO Chris Kempczynski said the environment was still “challenging” as inflation and the war in Ukraine weighed on its quarterly results.
Shares of the company were roughly flat in premarket trading.
Here’s what the company said, compared to what Wall Street expected, based on a survey of analysts by Refinitiv:
- Earnings per share: $2.55 adjusted
- Revenue: $5.72 billion vs. $5.81 billion expected
McDonald’s reported second-quarter net income of $1.19 billion, or $1.60 per share, compared with $2.22 billion, or $2.95 per share, a year earlier. The company announced a $1.2 billion charge Related to the sale of its Russian business due to the war in Ukraine.
That charge, excluding a French tax settlement and other items, left the fast-food giant earning $2.55 cents a share. According to Refinitiv estimates, the Wall Street firm was expected to post earnings of $2.47 per share. It’s unclear whether those numbers are comparable.
Net sales fell 3% to $5.72 billion, hurt in part by the closing of McDonald’s Russian and Ukrainian restaurants.
Global same-store sales rose 9.7% in the quarter, driven by strong international growth. Russian locations are excluded from the company’s same-store sales calculations, but Ukrainian restaurants are included.
US same-store sales rose 3.7% in the quarter, beating Street estimates of 2.8%. The company credited strategic price increases and its value proposition for its strong performance. Last quarter, McDonald’s executives said some lower-income consumers were trading down to cheaper options in response to inflation.
The company’s International Growth Licensed Markets division saw its same-store sales rise 16% in the quarter. Same-store sales in China shrank as the government reimposed Covid restrictions, but growth in Brazil and Japan offset the market’s weaker performance.
McDonald’s International Driven Market division reported same-store sales growth of 13%, driven by strong demand in France and Germany.
