(Reuters) – McDonald’s Corp beat estimates for quarterly sales on Thursday as the world’s largest fast-food chain benefited from price increases in the United States and the launch of a new loyalty program.
Rising wages due to a tight labor market and soaring costs of ingredients such as chicken and beef have forced U.S. restaurant chains to announce a series of price hikes, which have seen little resistance from consumers so far.
McDonald’s investments in delivery services, digital restaurant kiosks and drive-thru lanes have also given it an edge over smaller fast-food chains, which have been forced to cut down on operating hours due to staff shortages.
The introduction of a loyalty program late last year, letting subscribers on McDonald’s app earn points they can redeem on burgers and fries, has also helped drive a 3.5% increase in first-quarter comparable sales in the United States, its biggest market.
Analysts expected an increase of 3.3%, according to Refinitiv IBES.
Global comparable sales rose 11.8%, beating estimates of an 8.2% increase, boosted by the easing of COVID-19 restrictions in some overseas markets.
McDonald’s said it incurred $100 million in costs in the first quarter related to the likely disposal of inventory due the company’s decision to temporarily suspend operations in Russia and Ukraine.
McDonald’s, one of the first major Western brands to enter Russia after the fall of the Soviet Union, previously said the closure of restaurants in the region would cost $50 million a month, including lost revenue and wages payments.
Total revenue increased 11% to $5.67 billion, beating expectations of $5.59 billion.
Excluding costs to support the company’s business in Russia and Ukraine as well as other one-time expenses, McDonald’s earned a profit of $2.28 per share, a 19% increase from a year earlier.
(Reporting by Hilary Russ in New York and Uday Sampath in Bengaluru; Editing by Anil D’Silva)
