McDonald’s Q4 revenue drops over sluggish sales in Australia and China

McDonald’s Q4 revenue drops over sluggish sales in Australia and China

by Pranali Mehta

McDonald's Corporation failed to meet the fourth-quarter revenue estimations due to sluggish sales across its 4,500 chains in China and Australia. The two countries reverted to pandemic restrictions following a spike in COVID-19 cases, further causing a dip in the fast-food outlets.

The world's largest fast-food chain saw no increase in sales in Australia compared to the previous year, while in China, restaurants were prohibited from keeping dining options open owing to the recent outbreak of the Omicron variant.

McDonald’s revealed that the pandemic has limited its operating hours and dining capacity due to varying government policies in many countries. But business in European countries such as Germany, Italy, France, the United Kingdom, and even the United States saw a spike, resulting in a 13% gain in the corporation's overall growth amounting to USD 6.03 billion.

With over 40,000 restaurants in over 100 countries in tandem with supply chain bottlenecks have resulted in high cost of key ingredients such as beef, chicken, and packaging materials, further causing the fast-food giant’s expenses to rise steeply.

It is worth noting that McDonald's had also raised its prices in 2021 as higher costs continued to impede the company's profitability. Aside from that, the QSR behemoth was forced to raise worker wages in its largest market, the United States, causing a bigger dent in its remunerations.

In comparison to the previous year, total operating costs elevated by 14% to USD 3.6 billion. This is the company's highest quarterly cost surge since the last five years. Expert analysts predicted a 6.8% increase in U.S. turnover for McDonald’s, it gradually rose to 7.5%, primarily due to the introduction of special menu items such as McRib.

In the same context, while the global forecast for same-store sales was estimated to spike at 10.73%, McDonald's sales improved by 12.3%, resulting in a 19% increase in net income to USD 1.64 billion. Its earnings per share are presently at USD 2.23.

Source credit:

https://www.zawya.com/mena/en/story/McDonalds_revenue_takes_a_hit_from_pandemic_curbs_in_China_Australia-TR20220127nL4N2U72X1X1/

Pranali Mehta

A chemical engineer by qualification, Pranali Mehta dutifully walked down the slated path and worked in a chemical firm for a year. Her passion for writing however, pushed her into experimenting with the same as a career. With over three years of experience in content writ Read more...