McDonald's: High inflation? Higher Sales!

Here are some observations I obtained from their Q1'23 earnings.

It seems like geographic constraints were not a problem for McDonald's, as all regions reported a 12.6% growth.

In the US, strategic menu price increases and positive comparable guest count growth helped lifted the growth. This is significantly more than the 3.5% growth in Q1'22.

International-operated markets continued their momentum due to good contributions from Australia, Canada, France, Germany, and the U.K.

Now the earnings release did not drill down to what made the operating income and net income jump.

But from an investor's point of view, a higher operating income is mostly driven by higher selling prices and also better operating margins from lower costs.

The net income jump for Q1'23 is due to lower earnings in Q1'22, which includes pre-tax expenses of USD 127 million, or USD 0.13 per share, incurred to support the Company's business in Russia and USD 500 million, or USD 0.67 per share, of nonoperating expense related to the settlement of a tax audit in France.

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