By
Tolu Ajiboye
June 14th, 2023
Leading hamburger purveyor McDonald’s experienced earnings growth for Q1 2023 despite sporting a pricier menu.
McDonald’s Corporation (NYSE: MCD) has published its Q1 2023 earnings results which beat the consensus estimate. For the year’s first quarter, the fast food restaurant chain pulled in revenue of $5.9 billion versus the $5.59 billion expected by analysts. In addition, the prominent Chicago-based company realized earnings per share (EPS) of $2.63 adjusted versus $2.33 expected.
McDonald’s also experienced an increase in US customer traffic despite hiking the price of its products to remain competitive in a challenging economy. US traffic surged for the third straight quarter, which bucked the industry trend of waning traffic amid pricier menus. The McDonald’s factor is contrary to the industry trend because its meals are comparatively cheaper than those of its contemporaries. During economic downtime, consumers tend to patronize more affordable options. This trend considerably helped the fast food chain.
McDonald’s shares rose 1% in pre-market trading.
Beyond the US, McDonald’s also experienced commendable sales for Q1 2023, with markets in Europe and Australia beating estimates. According to reports, these internationally operated markets surpassed StreetAccount estimates of 8.5% same-store sales growth.
Meanwhile, McDonald’s international developmental licensed markets segment in countries like China and Japan surpassed the 10.5% same-store sales expectations.
Other Noteworthy Information from McDonald’s Q1 2023 Outing
All three McDonald’s divisions, including the US, International Operated Markets, and International Developed Licensed Markets, reported same-store sales growth of 12.6%. Elsewhere, the fast food chain reported a Q1 net income of $1.8 billion, or $2.45 per share. These figures represented an increase from the $1.1 billion, or $1.48 per share; the multinational food and real estate company made the year before.
McDonald’s also stressed that its reported $2.63 earnings per share excludes $180 million in restructuring charges and other items. Meanwhile, the company’s net sales grew by 4% to $5.9 billion for the period ended March 31st.
Commenting on McDonald’s first-quarter performance, company President and Chief Executive Officer Chris Kempczinski said:
“Our strong first quarter results demonstrate that our Accelerating the Arches strategy is working, as comparable sales grew 12.6% through a healthy balance of strategic menu price increases and positive traffic growth.”
Furthermore, the CEO of the world’s largest hamburger chain also added:
“Running 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’ve seen significant customer satisfaction improvement around the world. Amidst a challenging operating environment, customer demand for McDonald’s Brand remains strong.”
McDonald’s Reports Quarterly Earnings in Tech-Dominated Week
McDonald’s latest quarterly report comes amid slated releases by several corporations in various industries. Last week was dominated by the earnings of household names in the global banking sector, and this week sees tech stocks take center stage. Investors will be paying close attention to tech stocks as cues regarding the health of the economy. The reason is that the tech industry appears set to chart a new path for the global economy amid the banking crisis. Furthermore, artificial intelligence and its surging popularity have raised the stakes for the tech space.