Earnings Results: McDonald’s fourth-quarter results top expectations; stock falls premarket


McDonald’s Corp.’s fourth-quarter results beat analysts’ top and bottom line expectations Tuesday, although the restaurant chain’s stock fell before market open. 

The company said that its fourth-quarter results were negatively impacted by foreign currency pressures. McDonald’s

posted a net income of $1.903 billion, or $2.59 a share, up from $1.639 billion, or $2.18 a share, in the same period last year. Analysts surveyed by FactSet were looking for earnings of $2.46 a share. The restaurant chain reported fourth-quarter sales of $5.927 billion, down from $6.009 billion in the same period last year, but above the FactSet consensus of $5.720 billion.

Despite the top and bottom line beat, the company’s stock fell 2.2% premarket. McDonald’s stock has risen 4.6% in the last 12 months, compared with S&P 500 Index’s

11% decline.

See Now: McDonald’s fourth-quarter results top expectations, despite foreign currency

Same-restaurant sales were up 12.6%, above the FactSet consensus of 8.8%. In the U.S. comparable sales benefited from strategic menu price increases and positive guest counts, according to McDonald’s.

The company also highlighted the impact of menu and marketing campaigns, such as the Cactus Plant Flea Market promotion and McRib, as well as digital and delivery growth. Digital sales in McDonald’s top six markets were over $7 billion for the quarter, representing more than 35% of their sales.

In a statement, McDonald’s CEO Chris Kempczinski said that the company’s Accelerating the Arches growth strategy is delivering results, citing same-restaurant sales growth and 5% comparable guest count growth globally. “While we expect short-term inflationary pressures to continue in 2023, we remain highly confident in Accelerating the Arches, which now includes a greater emphasis on new restaurant openings,” he said. “The recently announced Accelerating the Organization initiative will complement this strategy to enable the McDonald’s System to be faster, more innovative, and more efficient.”

See Now: This McDonald’s in Texas is the first with a fully automated drive-through

Of 36 analysts surveyed by FactSet, 25 have an overweight or buy rating, 10 have a hold rating, and one has an underweight rating for McDonald’s.

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