McDonald’s increases sales and warns of continued inflation in the short term

The earnings report comes as investors watch for signs of recession after last year’s record inflation. McDonald’s could benefit if more low-income customers leave the higher-priced restaurants, as it did in the third quarter.

What to expect the company, CEO Chris Kempinski said in the earnings release “Short-term inflationary pressures will continue into 2023.”

The company reported earnings of $2.59 per share, an increase of 19%. Like other fast food chains, Chicago-based McDonald’s raised prices for hamburgers and french fries last year to counter rising labor and commodity costs.

However, traffic increased 5% in all of 2022, as McDonald’s meals continued to be cheaper than many competitors, attracting lower-income consumers.

In October, CFO Ian Borden said the company was “now gaining share among lower-income consumers” in the US due to the “affordability” of McDonald’s

It did not specify “low income,” but data provider NPD Group defines annual household income of $75,000 or less as “low income.”

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