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10 December 2023

McDonald's global sales up 7 per cent, as Middle East sales swell a tenth

The restaurant chain's sales have risen as cash-strapped consumers seek cheaper food options. (REUTERS)

By Reuters
McDonald's Corp said on Monday that worldwide sales at its restaurants open at least 13 months rose 7.1 per cent in January, driven by strength at home and abroad.

The world's largest hamburger chain, whose shares were up slightly in early trading, said January same-store sales rose 5.4 per cent in the United States due to demand for McDonald's core menu and breakfast items.

McDonald's has benefited in recent months as cash-strapped consumers shift to lower-priced fare during the recession.

The results were slightly better than Morningstar restaurant analyst R.J. Hottovy's expectations.

"I was thinking January was going to be a pretty soft month. But again, these guys continued to thrive in a down economy," he said. "They continued to execute both here and abroad."

Same-store sales rose 7.1 per cent in Europe, driven by strong results in Britain, France and Russia.

The company said sales in its Asia/Pacific, Middle East and Africa segment rose 10.2 per cent due to strong growth in Australia, China and other countries. Locally tailored chicken and beef menu items, convenient operating hours and Chinese New Year promotions aided sales, McDonald's said.

Systemwide sales rose 2.6 per cent for the month. Excluding the impact from a strengthening U.S. dollar, sales rose 9.1 per cent.

Foreign exchange rates have the capacity to impact earnings in the current quarter, Hottovy said, but noted that the pain would be temporary.

"Generally I like the long-term prospects (of McDonald's) even with this short-term pressure," he said.

McDonald's said same-store sales this month would suffer by 4 percentage points since February 2008 was a leap year.

McDonald's shares were up about 5 cents at $58.52 on the New York Stock Exchange.