McDonald’s Corporation (NYSE: MCD) shares weakened this trading week even though the company reported better than expected first-quarter results.
The U.S. stock market remains under pressure as tighter monetary policy signals from the Federal Reserve and the war between Ukraine and Russia continue to make investors nervous.
The global comparable sales have increased by 11.8%
McDonald’s reported better than expected first-quarter results on Thursday; total revenue has increased by 10.7% Y/Y to $5.67 billion, slightly above expectations, while the non- GAAP earnings per share were $2.28 ( beats by $0.11).
The positive fact is that global comparable sales increased 11.8% in the first quarter despite facing cost pressures. McDonald’s also delivered a 3.5% comparable sales gain in the U.S. compared with the first quarter in 2021.
The continued reduction of COVID-related government restrictions positively influenced sales growth, but strategic menu price increases and strong marketing promotions also had a big influence.
On the other side, the company’s businesses in Russia and Ukraine dragged on the profit line and net income for the first quarter fell to $1.104 billion from $1.54 billion a year ago.
McDonald’s has suspended operations in Russia and Ukraine, and the results included $27 million of costs related to the continuation of employee salaries, lease, and supplier payments, as well as $100 million of costs for inventory in the company’s supply chain. Chris Kempczinski, CEO of McDonald’s, said:
The past few years have demonstrated the resiliency of the McDonald’s brand and our ability to drive historical growth. We believe we’re well-positioned to weather unprecedented macro pressures like inflation, supply chain issues, labor availability, and COVID resurgences.
McDonald’s is well-positioned compared to peers in a turbulent environment, but
