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Jan. 29, 2022, 9:18 a.m. EST

McDonald’s earnings missed, but McRib helped U.S. sales growth beat expectations

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By Tonya Garcia

McDonald’s Corp. has a number of famous items on its menu, and the fast-food giant has turned its focus toward those products to drive results.

Though fourth-quarter earnings missed expectations , revenue rose 13.1% to $6.01 billion, and global comparable-store sales increased 12.3%.

“While we expect that 2022 will be a year of continued progress, we also anticipate that many of the challenges we experienced in 2021 will endure,” said Chief Executive Chris Kempczinski said on the Thursday earnings call.

“A surge in COVID-19 cases and a return of restrictions in many of our markets are creating uncertainty around the world, exacerbating labor shortages and supply chain delays. Additionally, rising consumer inflation levels are putting pressure on restaurant economics.” 

See: Pizza Hut adds a Spicy Lover’s Pizza to the menu lineup for a limited time

And: Starbucks introduces line of ready-to-drink energy beverages, will launch drinks with oatmilk

Three items contributed more than half of the company’s total business for the quarter.

“Iconic favorites like the Big Mac, Chicken McNuggets and our world-famous french fries drive almost 60% of our total business,” Kempczinski said.

Beyond these well-known items, limited-time items and new additions across the globe also gave the quarter a boost. The company called out “strong menu and marketing promotions, such as the McRib and Crispy Chicken Sandwich,” as contributors to strength in U.S. comparable-store sales.

Although global comp sales missed expectations, U.S. same-store sales rose 7.5% to beat forecasts for 6.8% growth.

And Chief Financial Officer Kevin Ozan called out the Double Big Mac in the U.K. and the new premium chicken line in France, which includes the McBaguette.

This week, McDonald’s /zigman2/quotes/203508018/composite MCD +1.75% also announced a new limited-time menu inspired by customer mashups, like the Land Air & Sea that combines the Big Mac, McChicken and Filet O’Fish into one sandwich.

A Chicken Big Mac is coming to the U.K. on Feb. 2 for a limited time.

And the plant-based McPlant, created with Beyond Meat Inc. /zigman2/quotes/211617595/composite BYND +1.23% is expanding to about 600 additional U.S. locations starting Feb. 14.

Also: McDonald’s is expanding its test of the plant-based McPlant sandwich to 600 more locations

“The company’s agility has also been demonstrated through innovations in its menu items,” wrote Ramsey Baghdadi, consumer analyst at GlobalData, in a note.

“At a time when outlet closures and ingredient shortages have proven key challenges, McDonald’s opted to slightly alter versions of classic menu items such as the McSpicy. These changes simultaneously satisfy adventurous consumers and those who gravitate toward familiar items with little operational changes needed on their end.”

/zigman2/quotes/203508018/composite
US : U.S.: NYSE
$ 238.00
+4.09 +1.75%
Volume: 3.05M
May 23, 2022 4:00p
P/E Ratio
25.15
Dividend Yield
2.32%
Market Cap
$173.00 billion
Rev. per Employee
$118,819
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/zigman2/quotes/211617595/composite
US : U.S.: Nasdaq
$ 24.67
+0.30 +1.23%
Volume: 2.47M
May 23, 2022 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$1.55 billion
Rev. per Employee
$328,394
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