Photo: Takashi Aoyama/Getty Images
High sales of two products were responsible for boosting McDonald’s restaurants during the fourth quarter of 2022: happy meals for adults and the McRib sandwich farewell tour.
Despite higher prices, sales in stores open at least a year increased by 12.6% in the October-December period, as reported by the company. Those numbers beat Wall Street expectations for an 8.8% rise.
The company attributed the success to increase in sales that skyrocketed in October after McDonald’s launched Adult Happy Meals with limited-edition toys designed by clothing brand Cactus Plant Flea Market.
Half the toys for those meals disappeared in the first four days of the promotion, said executive director Chris Kempczinski.
In addition, the “farewell tour” promotion for the McRib sandwich, a cult favorite, drew more customers in November.
Weak revenue from stores abroad
Strong sales in the United States helped overcome weakness in China, where government restrictions due to the Covid-19 pandemic hit stores.
Fourth-quarter revenue fell 1% to $5.9 billion, still exceeded analysts’ expectations of $5.7 billion dollars. Foreign earnings were weaker due to the strength of the dollar.
60% of McDonald’s sales come from outside the US. Net income increased 16% to $1.9 billionor $2.59 per share, beating earnings projections by 13 cents.
Kempczinski said in a prepared statement that inflation will continue to put pressure on the company this year. The company had said it expected food and paper costs to rise 12-14% in 2022, while its labor costs would rise 10%.
McDonald’s also committed resources to a campaign against a new California law that calls for minimum wages of up to $22 an hour for fast-food employees.
The company assures that it is a radical measure that would have harmful effects that will force prices to increase and will force companies to lay off workers.
In early January, the company announced a corporate restructuring designed to improve efficiency and speed up the opening of new restaurants. McDonald’s said the plan will likely include corporate layoffs and details will be shared by April 3.
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