McDonald's Q4 Profit Rises 19%, But Results Miss Estimates

mcdonalds april29 27jan22 lt

Fast-food giant McDonald's Corp. (MCD) reported Thursday a profit for the fourth quarter that increased 19 percent from last year, reflecting stronger operating performance across all segments due to higher sales-driven restaurant margins. Global comparable sales also grew 12.3 percent. Both adjusted earnings per share and quarterly revenues missed analysts' expectations.

In Thursday's pre-market trade, MCD is trading at $244.20, down $5.65 or 2.26 percent.

"While 2021 was a year of continued challenges around the world, the McDonald's System came together with unparalleled dedication and delivered truly exceptional performance," said McDonald's President and CEO Chris Kempczinski.

For the fourth quarter, the foodservice retailer reported net income of $1.64 billion or $2.18 per share, up about 19 percent from $1.38 billion or $1.84 per share in the prior-year quarter.

Excluding strategic charges of $0.05 in 2021 and strategic gains of $0.14 per share in 2020, adjusted earnings were $2.23 per share, compared to $1.70 per share in the year-ago quarter.

On average, 31 analysts polled by Thomson Reuters expected the company to report earnings of $2.34 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter grew 13 percent to $6.01 billion from $5.31 billion in the same quarter last year, and it was up 14 percent in constant currencies. Analysts expected revenues of $6.03 billion for the quarter.

Global comparable sales increased 12.3 percent, reflecting positive comparable sales across all segments, a growth of 7.5 percent in the U.S., 16.8 percent in the International Operated segment and 14.2 percent in the International Developmental Licensed segment. Systemwide sales increased 13 percent or 14 percent in constant currencies.

Comparable sales were impacted in both periods by COVID-19. U.S. comparable sales benefited from strong average check growth driven by strategic menu price increases. Strong menu and marketing promotions, such as the McRib and Crispy Chicken Sandwich, and growth in digital channels, driven by the Company's loyalty program, also contributed to the comparable sales growth.

"We enter this new year with a clear focus on creating seamless and memorable customer experiences and harnessing our momentum to drive long-term, sustainable growth for all of our stakeholders," Kempczinski added.

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