Price hikes in the US market helped lift first-quarter sales at McDonald’s, while profits tumbled due to an unspecified tax matter, according to results released Thursday.
The “Golden Arches” chain scored an impressive 12 percent jump in global comparable sales, reflecting “strategic menu price increases” in the United States and improvement in many overseas markets as Covid-19 restrictions eased, the company said.
But a weak spot was China, where the company suffered a drop in comparable sales following fresh government restrictions on Covid-19.
The company also was hit by $127 million in costs connected to the suspension of business in Russia and Ukraine. McDonald’s has continued to pay employee salaries, leases and supply chain costs.
Revenues rose 11 percent to $5.7 billion, while earnings dropped 28 percent to $1.1 billion.
The decline in profits was due to a $500 million hit “to reserve for a potential settlement related to an international tax matter,” McDonald’s said in the earnings release.
A McDonald’s spokeswoman did not immediately respond to a request for more details.
McDonald’s Chief Executive Chris Kempczinski touted the company’s ability to navigate “an increasingly complex and uncertain operating environment.”
“By staying on the side of the consumer and executing our strategy … we have continued to drive growth,” Kempczinski said, who added that the strategy has also showcased “our core equities of chicken and beef.”
Shares rose 2.0 percent to $252.17 in pre-market trading.
