The earnings report comes as investors are watching for signs of a recession after record inflation last year. McDonald’s could benefit if more lower-income customers leave higher-priced restaurants, as happened in the third quarter.
Chief Executive Chris Kempczinski said in the earnings release that the company expects “short-term inflationary pressures continue into 2023”.
The company posted a profit of $2.59 per share, an increase of 19%. Like other fast-food chains, Chicago-based McDonald’s raised prices on its hamburgers and fries last year to cope with rising labor and commodity costs.
Even so, traffic increased 5% in all of 2022, as McDonald’s meals continued to be cheaper than many competitors, attracting low-income consumers.
In October, chief financial officer Ian Borden said the company was “gaining share right now among low-income consumers” in the US due to McDonald’s “affordability”
It did not define “low income,” but data provider NPD Group defines annual household income of $75,000 or less as “low income.”
Source: Ambito
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