\A sign is posted outside a McDonald’s restaurant on April 28, 2022 in San Leandro, California.
Justin Sullivan | Getty Images
McDonald’s said Tuesday that both higher prices and premium items drove US same-store sales growth, which came in higher than expected in the second quarter.
However, CEO Chris Kemczinski said the environment was still “challenging” as inflation and the war in Ukraine weighed on quarterly results.
The company’s shares were roughly flat in premarket trading.
Here’s what the company reported, compared to Wall Street expectations, based on a poll of analysts by Refinitiv:
- Earnings per share: Adjusted $2.55 vs. $2.47 expected
- Revenue: $5.72 billion versus $5.81 billion expected
McDonald’s reported net income of $1.19 billion, or $1.60 per share, for the second quarter, compared to $2.22 billion, or $2.95 per share, a year ago. The company reported a $1.2 billion charge related to the sale of its Russian business due to the war in Ukraine.
Excluding that fee, a French tax return and other items, the fast-food giant earned $2.55 per share.
Net sales fell 3% to $5.72 billion, partially impacted by the closure of McDonald’s Russian and Ukrainian restaurants.
Global same-store sales rose 9.7% for the quarter, driven by strong international growth. Russian locations were excluded from the company’s same-store sales calculations, but Ukrainian restaurants were included.
U.S. same-store sales rose 3.7% for the quarter, beating StreetAccount’s estimate of 2.8%. The company cited strategic price increases and its value proposition for its strong performance. Last quarter, McDonald’s executives said some low-income consumers were switching to cheaper options in response to inflation.
The company’s international development licensing markets division reported same-business revenue growth of 16% for the quarter. Same-store sales fell in China as the government reinstated Covid restrictions, but growth in Brazil and Japan more than offset weak market performance.
McDonald’s internationally operated stores segment reported same-store sales growth of 13%, driven by strong demand in France and Germany.
Read the full earnings report here.