McDonald’s Corporation (NYSE:MCD) released second-quarter profits on Tuesday that were higher than anticipated due to impressive global comparative sales despite rising prices for fast food customers due to inflation.
McDonald’s (NYSE:MCD) reported that diluted income for the three months ending in June was expected to be $2.55 per share, up 7.6 % from the comparable period in 2017 and significantly higher than the $2.47 per share Street consensus estimate. McDonald’s (NYSE:MCD) reported that group revenues decreased 2.9 % to $5.72 billion, slightly missing analysts’ projections of a $5.82 billion total.
The largest restaurant in the world reported that same-store sales increased 9.7% globally for the period, significantly exceeding Street predictions as Covid restrictions loosened and restaurants reopened. In comparison, U.S. sales increased by 3.7%.
CEO Chris Kempczinski announced that the company’s second-quarter performance reflects outstanding execution against its Accelerating the Arches strategy. He further said, by focusing on our customers and crew, enabled by a rapidly growing digital capability, we delivered global comparable sales growth of nearly 10%.
Kempczinski said the operating environment across the competitive landscape remains challenging nonetheless. And also said, while they are planning for a wide range of scenarios, he is confident that their plans and people position McDonald’s (NYSE:MCD) to weather this environment better than others.
Following the announcement of the earnings report, shares owned by McDonald’s (NYSE:MCD) were marked 0.33 % higher in pre-market trading, resulting in an opening bell price of $251.20 per share. McDonald’s (NYSE:MCD) said earlier this spring that it would permanently leave the Russian market, putting an end to more than thirty years of operations in the former Soviet Union, due to the growing humanitarian situation associated with the assault on Ukraine.
The whole portfolio of McDonald’s (NYSE:MCD) restaurants was sold to restaurant owner Alexander Govor for an undisclosed fee after the fast food chain ceased operations in Russia on March 22. The firm said that the transaction would result in a non-cash loss for the largest restaurant chain in the world of almost $1.3 billion. Following that choice, Starbucks (NASDAQ:SBUX) made a similar decision.
Starbucks (NASDAQ:SBUX), after operating in Russia for more than fifteen years, announced that it would permanently cease business there. This move comes as big American corporations continue to leave the former Soviet Union as a result of Russia’s ongoing conflict with Ukraine.
Starbucks (NASDAQ:SBUX) said that it would discontinue its brand presence in Russia, where it operates 130 stores and employs 2,000 people as part of a so-called “Green Apron” relationship with the Alshaya Group a company with headquarters there.
Starbucks’ operations in Russia were suspended in March. Kevin Johnson, the company’s then-CEO, promised to “make decisions that are true to our vision and values and speak with transparency” regarding the company’s further endeavors. Johnson left the organization shortly after to become what the group refers to as a “special consultant” to the corporation and its board of directors; Howard Schultz took Johnson’s position. Schultz returned to the group on an interim basis, basically without compensation.
Starbucks (NASDAQ:SBUX) said in a statement that, as was mentioned on March 8, they have suspended all business activity in Russia, including shipment of all Starbucks (NASDAQ:SBUX) products. “Starbucks (NASDAQ:SBUX) has made the decision to exit and no longer have a brand presence in the market. We will continue to support the nearly 2,000 green apron partners in Russia, including pay for six months and assistance for partners to transition to new opportunities outside of Starbucks (NASDAQ:SBUX),” Starbucks (NASDAQ:SBUX) added.
Featured Image: Megapixl @Spflaum
