McDonald's benefits from price hikes
McDonald's US same-store sales grew 3.5% in the first quarter
McDonald's reported that U.S. sales surged during the first quarter driven in part by rising prices across the industry.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| MCD | MCDONALD'S CORP. | 292.44 | -1.80 | -0.61% |
Sales at stores that were open at least a year increased 3.5% in the January-March period, even in the midst of an "increasingly complex and uncertain operating environment," according to McDonald's CEO Chris Kempczinski.
A McDonald's employee in Eden Prairie, Minn. (iStock / iStock)
Although the fast-food chain raised prices, there is one menu item, at least, that consumers don't mind paying more for.
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"Higher average check driven by strategic price increases continued to be a significant growth driver and strong marketing campaigns across loyalty, value bundles and our Crispy Chicken Sandwich delivered incremental sales and continued to drive digital adoption" said Chief Financial Officer Kevin Ozan on the earnings conference call.
The company also said that it continued to benefit from the launch of its loyalty program, MyMcDonald's Rewards, which launched last year.
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The strength in the U.S. and other markets has helped the company offset negative same-store sales in its China market, which is facing COVID-19 resurgences and related government restrictions, as well as troubles in its Russia market.
McDonald's decided to halt operations in Russia in early March due to Moscow's invasion of Ukraine.
A customer walks past a statue of Ronald McDonald on display outside a McDonald's restaurant in Beijing on July 31, 2014. (AP Photo/Andy Wong, File / AP Newsroom)
The company projected that it would cost around $50 million per month, or about 5 to 6 cents per share, to temporarily suspend its operations and close its restaurants.
McDonald's owns approximately 84% of its 847 Russia locations and 100% of its 108 Ukraine locations. Russia and Ukraine combined represented approximately 2% of the company's systemwide sales.
FOX Business' Lucas Manfredi contributed to this report.