McDonald's earnings beat profit estimates despite growing inflation
McDonald's shares increased by 2.7% during premarket trading following the release of the earnings report
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Despite record inflation, McDonald's Corp surged past prior sales and profit estimates, according to an earnings report released on Thursday.
Recently, the fast-food chain has raised the prices for its burgers and fries to match rising labor and commodities costs; however, demand was steady as McDonald's remains cheaper than competitor dine-in restaurants.
In the United States, McDonald's comparable sales rose by 6.1%, marking the ninth consecutive quarter of growth. Meanwhile, international comparable sales increased by 10% as prices for the chain's iconic Big Mac rose.
The burger company's digital systemwide sales were reported to be nearly $7 billion in McDonald's top six markets. During premarket trading, McDonald's shares increased by 2.7% at 263.58 per share.
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McDonald's third quarterly earnings report beat prior estimates despite an overall decreased in total revenue. (AP Photo/Gene J. Puskar, File / AP Newsroom)
"Our third quarter 2022 performance demonstrated broad-based business momentum as global comparable sales increased nearly 10%. I remain confident in our Accelerating the Arches strategy as our teams around the world continue to execute at a high level," said Chris Kempczinski, McDonald’s president and CEO.
"As the macroeconomic landscape continues to evolve and uncertainties persist, we are operating from a position of competitive strength. I also want to thank our franchisees, who have done a tremendous job navigating this environment, while providing great value to our customers," Kempczinski added.
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However, overall net income dropped by 8% to $1.98 billion, or approximately, $2.68 per share. Total revenue surpassed prior estimates of $5.69 billion with $5.87 billion but declined by 8% during the quarter.
McDonald's is considered one of the largest fast-food retailers in the world, with well over 200,000 employees and 40,000 locations worldwide.