McDonald’s (MCD) reported earnings and same-store sales that topped expectations before the market open on Tuesday.
The company reported U.S. same-store sales that rose 3.7% while international sales rose 9.7% during the most recent quarter.
Wall Street analysts had expected same-store sales would rise 2.9% during the quarter, according to data from Bloomberg. Global same-store sales had been expected to rise 9.1% in Q2.
Adjusted earnings per share hit $2.55 against expectations for earnings of $2.46. Revenue in Q2 totaled $5.72 billion against expectations for $5.83 billion.
In the U.S., sales were driven by menu price increases, as well as value offerings on the everyday menu and digital offerings. Digital sales exceeded $6 billion in the company’s top six markets this quarter, representing one-third of total systemwide sales.
McDonald’s international operated markets saw same-store sales jump 13.0% led by sales in France and Germany.
In international developmental license markets, McDonald’s saw strong sales led by Japan and Brazil. However, strong growth was offset by a decline in sales in China due to a resurgence of COVID-19 cases and government restrictions.
Shares of the company were down about 0.5% in pre-market trading. Through Monday’s close, shares of the company have lost 6.6% this year against a 16% decline for the S&P 500.
In the company’s release, CEO Chris Kempczinski said, “the operating environment across the competitive landscape remains challenging. While we are planning for a wide range of scenarios, I am confident that our plans and people position McDonald’s to weather this environment better than others.”
Ahead of this report, inflation had been top of mind for investors, with surging prices pressuring consumers and causing some McDonald’s franchise owners to ditch deals like the $1 drink promotion.
McDonald’s incurred charges totaling $1.2 billion in the quarter related to the sale of its business in Russia and a gain of $271 million related to the company’s sale of its Dynamic Yield business.
In May, the company announced plans to sell its Russia business entirely to one of its local licensees there. In June, Russia locations re-opened rebranded as ‘Vkusno-i Tochka’ which translates to ‘Tasty-period.’
In the release, the company noted company-operated margins were negatively impacted by the closures in both Russia and Ukraine, in addition to inflationary pressures on labor and commodities.
More to come…
Brooke DiPalma is a producer and reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at [email protected]
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