Leading hamburger supplier McDonald’s saw profit growth for the first quarter of 2023 despite a pricier menu.
McDonald’s Corporation (NYSE: MCD) has released its report for the first quarter of 2023. earnings results which beat the consensus estimate. In the first quarter of the year, the fast food chain generated revenue of $5.9 billion, versus the $5.59 billion expected by analysts. In addition, the prominent Chicago-based company posted earnings per share (EPS) of $2.63, adjusted versus the $2.33 expected.
McDonald’s has also seen an increase in customer traffic in the US despite higher prices for its products to remain competitive in a challenging economy. U.S. traffic rose for the third consecutive quarter, bucking an industry trend of declining traffic amid higher price listings. The McDonald’s factor goes against the industry trend because its meals are relatively cheaper than those of its contemporaries. During economic downturns, consumers tend to adopt more affordable options. This trend has greatly helped the fast food chain.
Shares of McDonald’s rose 1% in premarket trading.
Outside the US, McDonald’s also saw commendable sales for the first quarter of 2023, with markets in Europe and Australia beating estimates. According to reports, these internationally operated marketplaces beat StreetAccount estimates of same-store sales growth of 8.5%.
Meanwhile, McDonald’s international development license market segment in countries such as China and Japan beat same-store sales forecasts by 10.5%.
Other noteworthy information from McDonald’s outing for the first quarter of 2023
All three McDonald’s divisions, including US, International Operating Markets and International Developed Licensed Markets, reported same-store sales growth of 12.6%. Elsewhere, the fast food chain reported net income of $1.8 billion, or $2.45 per share, in the first quarter. Those numbers represent an increase of $1.1 billion, or $1.48 per share. The multinational food and real estate company made the previous year.
McDonald’s also stressed that its reported earnings of $2.63 per share excludes $180 million in restructuring fees and other items. Meanwhile, the company’s net sales grew 4% to $5.9 billion for the period ended March 31.
Commenting on McDonald’s performance in the first quarter, company president and CEO Chris Kempzynski said:
“Our strong first-quarter results show that Arches’ acceleration strategy is working well, as comparable sales grew 12.6% through a healthy balance between strategic increases in list prices and positive traffic growth.”
Moreover, the CEO of the largest hamburger chain in the world also added:
“Operating great restaurants is fundamental to our business momentum. We have refocused on operational excellence through our global Performance and Customer Excellence (PACE) initiative, and we have seen a significant improvement in customer satisfaction around the world. Amidst a challenging operating environment, customer demand for the McDonald’s brand remains business is strong.
McDonald’s reports quarterly earnings in a week dominated by technology
McDonald’s latest quarterly report comes amid scheduled releases by several companies across various industries. Earnings for household names in the global banking sector dominated last week, and this week sees technology stocks take center stage. Investors will pay close attention to technology stocks as clues as to the health of the economy. The reason is that the tech industry seems poised to chart a new course for the global economy amid the banking crisis. Moreover, artificial intelligence and its growing popularity has raised the stakes for the technology field.
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Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify cryptocurrency stories down to the bare essentials so that anyone anywhere can understand without much background knowledge. When he’s not deep into cryptocurrency stories, Tolo enjoys music, loves to sing, and is a movie lover.
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