McDonald’s reported sales that beat estimates as consumers continue to eat out despite higher prices.
He was closely watching same-store sales soar 9.7 percent year-on-year in the second quarter, the company said yesterday.
Analysts were expecting a 7.5 percent gain, according to data compiled by Bloomberg. Sales in US stores open for at least a year rose 3.7 percent, also beating expectations.
The Big Mac salesman said U.S. sales growth was supported by strategic price increases and value-added offerings, in addition to the popularity of digital tools like the mobile app and delivery.
The company had said in April that some diners had switched to less expensive menu options, and that trend continued in the most recent quarter. However, overall U.S. guest counts were relatively flat, suggesting demand hasn’t been eroded by decades of inflation.
“Typically when you get into a tougher economic environment, McDonald’s does well,” said Brian Yarbrough, an analyst at Edward Jones. “But you have to wonder how much longer they can keep going” to raise prices, he said.
said McDonald’s his US menu prices are up in the high single digits compared to last year and he expects them to rise in a similar range for the full year.
Adjusted earnings beat estimates and came in at $2.55 (€2.52) per share compared to an estimate of $2.46. Digital sales are also growing, exceeding $6 billion in the quarter in top six markets, accounting for nearly a third of total sales.
This number includes sales at all restaurants, franchises, and corporate restaurants.
“The McDonald’s system continues to demonstrate strength and resilience,” Chief Executive Officer Chris Kempczinski said in a statement. “While we plan for a variety of scenarios, I am confident that our plans and people will position McDonald’s to weather this environment better than others.”
The company is one of the first restaurant chains to report earnings. Its results paint a relatively optimistic picture of US consumer strength, despite the highest inflation in four decades.
That could soften the blow of Walmart’s surprise cut in forecast late Monday, which some interpreted as a red flag for the broader economy.
https://www.independent.ie/business/world/customers-coming-back-to-mcdonalds-despite-pricier-menu-41869966.html Customers keep coming back to McDonald’s despite the more expensive menu