Inflation hits McDonald's on food costs, labor
The McRib and Crispy Chicken Sandwich helped lure in customers
McDonald’s says inflationary pressures will stick around in 2022 after profits and sales fell short of estimates.
In the U.S., the Golden Arches burger chain reported that same-store sales – or restaurants open at least a year – rose 7.5% from October to December. For the full year, same-store sales notched 13.8%, which marked "the highest U.S. annual comparable sales ever reported," McDonald's announced in its earnings release Thursday.
Still, adjusted earnings of $2.23 per share were 11 cents short of Wall Street expectations, while revenue rose 13% to $6.01 billion for the last three months of the year, which was also just shy of Wall Street expectations, according to a survey of industry analysts by FactSet, with sales crimped by coronavirus restrictions in Australia and China. For the full year, revenue increased 21% to $23.2 billion.
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This growth was aided in part by the "strong menu and marketing promotions" for items like the McRib and Crispy Chicken Sandwich, which lured in customers even with higher menu prices, according to McDonald's. The company also said same-store sales benefited from the loyalty program.
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McDonald’s raised hourly pay for 36,000 U.S. employees at its company-owned restaurants last year. Franchisees own 93% of McDonald’s 40,000 restaurants worldwide, but several thousand stores are owned by McDonald’s.
The Associated Press contributed to this report.