McDonald’s reported higher-than-expected first-quarter sales as store traffic increased despite higher prices.
Global sales at the same stores were up 12.6% from last yr’s January-March period, the Chicago-based burger giant said Tuesday. According to analysts polled by FactSet, that is well above the 8.7% growth Wall Street had forecast.
Good weather in January and straightforward comparisons with last yr – when the coronavirus lowered demand – helped boost sales. McDonald’s also said there has also been a gentle recovery after the lifting of COVID-related restrictions in China.
Marketing campaigns resembling the promotion of the McSpicy chicken sandwich with the streetwear brand in China and the promotion of the Valentine’s Day Meal in the US with rappers Offset and Cardi B also boosted the network’s performance.
CEO Chris Kempczinski said the company was starting to see resistance to price increases in many markets. For instance, customers might not be adding fries to their order, and delivery orders have slowed down as customers reconsider the extra cost.
“It is a reminder that we want to be very disciplined in pricing,” Kempczinski said during a Tuesday conference call with investors. “The client is certainly coping with some stress and pressure in this regard.”
But McDonald’s also has to reckon with higher prices for food, paper and employees. CFO Ian Borden said US inflation is falling but stays elevated. In Europe, the company expects double-digit percentage inflation to proceed until the end of this yr.
![McDonald's sign](https://nypost.com/wp-content/uploads/sites/2/2023/04/NYPICHPDPICT000010127200.jpg?w=1024)
“Europe is working in the eye of the cyclone,” he said.
McDonald’s hopes that improvements to its menu will proceed to drive store traffic this yr. The corporate announced this month that U.S. restaurants would switch to softer buns and more melting cheese, and alter grill settings to make their burgers juicier. The corporate said the changes have already been implemented in 15 other markets, including Australia and Canada, where they’ve improved customer taste rankings.
Revenue rose 4% to nearly $5.9 billion in the first quarter, also beating analysts’ forecasts of $5.6 billion.
![Big Mac](https://nypost.com/wp-content/uploads/sites/2/2023/04/NYPICHPDPICT000009767045-1.jpg?w=1024)
Despite the huge results, McDonald’s laid off several hundred corporate employees earlier this month in an effort to speed up innovation and decision-making. McDonald’s booked a restructuring fee of $180 million – or 18 cents per share – in the first quarter to account for redundancies and the closure of some regional offices.
Without this one-time levy, McDonald’s earned $2.63 per share, 30 cents greater than expected.
McDonald’s shares fell lower than 1% on Tuesday.