Salem Radio Network News Monday, August 15, 2022

Business

McDonald’s sales and profit top estimates on resilient fast-food demand

(Reuters) -McDonald’s Corp on Tuesday reported comparable sales and profit above market expectations even as expenses soared, as the burger chain benefited from steady online demand, new product launches and higher prices.

The burger chain’s global same-store sales jumped nearly 10% in the second quarter compared with expectation of a 6.5% rise.

Faced with higher labor and ingredients expenses, U.S. restaurants have been raising prices of pizzas, burritos and hamburgers.

Despite that sales have held up even as consumers grapple with higher prices of gas and everyday essentials. With increasing evidence of a pullback in consumer spending, Chief Executive Chris Kempczinski said, “the operating environment across the competitive landscape remains challenging.”

To add customers, McDonald’s introduced online-exclusive offers that boosted its app downloads, while the launch of new offerings, including Spicy Chicken McNuggets and Chocolatey Pretzel McFlurry, has also helped.

Total expenses surged 25% to $4.01 billion in the second quarter, weighing on net income, which nearly halved to $1.19 billion, or $1.60 per share.

The results included $1.2 billion of charges related to the sale of its business in Russia. On an adjusted basis, earnings per share of $2.55 exceeded estimates of $2.47, according to Refinitiv data.

Total revenue fell 3% to $5.72 billion and missed expectations of $5.81 billion, hit by weak demand in China due to COVID-19 resurgences and related government curbs.

(Reporting by Praveen Paramasivam in Bengaluru and Hilary Russ in New York; Editing by Arun Koyyur)

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