McDonald’s Sales Soar as Bidenflation Boosts Burger Prices

McDonald’s was not clowning around in the third quarter.

The fast-food restaurant company reported profits and sales that beat estimates, sending shares higher by more than one percent on Monday morning.

The secret sauce? Higher prices.

Revenue rose 14 percent to $6.69 billion, topping expectations for $6.56 billion. Comparable store sales, a metric that tracks restaurants open for more than a year, grew by 8.8 percent. Analysts had been expecting an 8.0 percent increase.

“The macroeconomic environment is unfolding in line with our expectations for the year, and we continued to deliver convenience and value for our customers,” said Chief Executive Chris Kempczinski.

In the U.S., comparable store sales increased 8.1 percent, exceeding analysts’ forecasts for 7.5 percent growth.

“Comparable sales results benefited from strong average check growth driven by strategic menu price increases,” the company said.

The increased prices more than offset a decline in foot traffic to stores.

The company said it is seeing signs that inflation is putting a damper on spending by lower-income customers.

“One of the things that we saw industry-wide is that that low-income consumer, which we would say is $45,000 and under, was negative from an industry standpoint,” Kempczinski told analysts on a call to discuss the quarterly results.

Net income rose to $2.32 billion, or $3.17 a share, from $1.98 billion, or $2.68 a share, in the third quarter of 2022. Excluding nonrecurring restructuring costs, adjusted earnings per share came in at $3.19, comfortably above the estimate for $3.00 per share.