McDonald’s Corporation (NYSE:MCD) outperformed forecasts for revenue and sales in the first quarter of 2023 due to strong consumer demand and pricing hikes that helped reduce high costs.
The international burger franchise recorded $5.9 billion in revenue for the three months ending March 2023, a rise of 4.1% from the same period in the previous year. The same period’s $2.63 EPS is up from $2.28 from the prior year. An unexpected difference of +5.77% between the reported revenue and the $5.58 billion Zacks Consensus Estimate was noted.
Additionally, McDonald’s outperformed analysts’ predictions for comparable sales, which increased by 12.6% globally and in each of its geographic segments. The same-store sales growth in its home market of the U.S. exceeded StreetAccount projections of 7.9% thanks to higher menu prices and more customers. In contrast to the industry tendency of declining visitation as menu prices climb, McDonald’s U.S. traffic increased for the third consecutive quarter.
The business credited its strategic initiatives for its great performance, including the improvement of its burgers, the introduction of new menu items like the Crispy Chicken Sandwich and the McPlant burger, and collaborations with celebrities like Cardi B and Offset for advertising campaigns.
Investing in digital initiatives like its loyalty programme, smartphone app, delivery services, and drive-thru improvements paid off for McDonald’s as well. Since its debut in July 2022, the company claims to have acquired more than 10 million new members to its loyalty programme in the United States.
Additionally, the business disclosed that it would increase its capital expenditures by $500 million to $2.5 billion for 2023, with almost half of that sum going towards opening new restaurants in important emerging regions like China and India.
Despite the ongoing difficulties brought on by the COVID-19 outbreak and inflationary pressures, McDonald’s CEO Chris Kempczinski expressed optimism about the company’s prospects for the remainder of the year.
In a statement, he stated, “We are confident that we have the proper initiatives in place to continue growing our business while delivering value to our customers, franchisees, shareholders, and communities.