NEW YORK: McDonald’s on Tuesday (Jan 31) reported a jump in fourth-quarter profit following higher sales in most markets, scoring with consumers worried about inflation.
The fast-food giant notched 12.6% comparable sales growth globally in the quarter ending Dec 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 he said the company must stay “judicious” in terms of passing on higher operating costs to consumers.
Profit during the quarter was US$1.9 billion (RM8.1 billion), up 16% on the year-ago period on a 1% dip in revenue to US$5.9 billion.
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.
He said prices in the United States rose about 10% over the course of 2022.
To assist its partners, especially in Europe, McDonald’s plans US$100 million to US$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% to US$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. – AFP