McDonald's sales fattened by McRib and Adult Happy Meals
Adult Happy Meals and other limited-time promotions boosted traffic at McDonald's restaurants during the fourth quarter despite higher prices.
Global same-store sales, or sales at stores open at least a year, rose 12.6% in the October-December period, the Chicago company said Tuesday. That beat Wall Street expectations for an 8.8% increase, according to analysts polled by FactSet. U.S. same-store sales rose 10.3%.
Sales soared in October after McDonald's launched adult Happy Meals featuring limited-edition toys designed by the streetwear brand Cactus Plant Flea Market. Half of the toys for those meals were gone in the first four days of the promotion, CEO Chris Kempczinski said earlier.
A "farewell tour" for the cult favorite McRib sandwich drew in more customers in November.
Strong sales at home helped overcome weakness in China, where stores were impacted by government COVID-19 restrictions.
Departure from Russia
Faced with boycott calls and a plea from a large investor, McDonald's in March 2022 announced it would temporarily shut its 850 restaurants in Russia due to the country's invasion of Ukraine. The burger giant also closed its Ukrainian restaurants but continued to pay more than 10,000 McDonald's employees in the country.
In August last year, McDonald's began gradually reopening some restaurants in the capital, Kyiv, and western Ukraine, a symbol of the war-torn country's return to some sense of normalcy and a show of support.
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Fourth-quarter revenue fell 1% to $5.9 billion, but that still beat analysts expectations for $5.7 billion. Overseas revenue was weaker because of the strong dollar; 60% of McDonald's sales come from outside the U.S. Net income rose 16% to $1.9 billion, or $2.59 per share, topping profit projections by 13 cents.
Kempczinski said in a prepared statement that higher inflation will continue to pressure the company this year. The company had said it expects food and paper costs to be up 12% to 14% in 2022, while its labor costs would rise 10%.
In early January, the company announced a corporate restructuring designed to improve efficiency and accelerate new restaurant openings. McDonald's said the plan will likely include corporate layoffs; it told employees it would share more details by April 3.
