“The operating environment across the competitive landscape remains challenging,” said CEO Chris Kempczinski.
McDonald’s Corp. (MCD) – Get McDonald’s Corporation Report posted better-than-expected second quarter earnings Tuesday as global comparable sales continued to impress even as inflation costs forced higher costs on fast-food customers.
McDonald’s said diluted earnings for the three months ending in June were pegged at $2.55 per share, up 7.6% from the same period last year and firmly ahead of the Street consensus forecast of $2.47 per share. Group revenues, McDonald’s said, fell 2.9% to $5.72 billion, just shy of analysts’ estimates of a $5.82 billion tally.
The world’s biggest restaurant said same-store sales rose 9.7% for the period on a global basis, firmly ahead of Street forecasts, as Covid restrictions faded and restaurants re-opened, while U.S. sales jumped 3.7%.
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“Our second quarter performance reflects outstanding execution against our Accelerating the Arches strategy,” CEO Chris Kempczinski. “By focusing on our customers and crew, enabled by a rapidly growing digital capability, we delivered global comparable sales growth of nearly 10%.”
“Nonetheless, the operating environment across the competitive landscape remains challenging,” he added. “While we are planning for a wide range of scenarios, I am confident that our plans and people position McDonald’s to weather this environment better than others.”
McDonald’s shares were marked 0.3% lower in pre-market trading immediately following the earnings release to indicate an opening bell price of $249.60 each.
Earlier this spring, McDonald’s said it would permanently exit the Russia market, ending more than three decades of operations in the former Soviet Union, as a result of the humanitarian crisis linked to the ongoing assault of Ukraine.
McDonald’s, which suspended its operations in Russia on March 22, sold its entire portfolio of restaurants to restaurant operator Alexander Govor for an undisclosed sum. The world’s largest restaurant chain will take a non-cash hit of around $1.3 billion linked to the sale, the company said.
That decision was followed by a similar move from Starbucks’ (SBUX) – Get Starbucks Corporation Report, the world’s biggest coffee chain, which exited Russia after more than fifteen years.
Starbucks said it will no longer have a brand presence in Russia, where it has around 130 locations and employees around 2,000 people through a so-called ‘Green Apron’ partnership with the Russia-based Alshaya Group.
