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July 27, 2022

McDonald’s Q2 profit slumps 46% as Russia-related charges bite

The American fast-food giant’s revenues declined by 3% to $5.72bn.

McDonald’s has reported a net income of $1.19bn, or $1.6 per share, for the second quarter of 2022, a slump of almost 46% compared with $2.22bn, or $2.95 per share, a year ago.

In the wake of the war in Ukraine, the fast-food chain experienced a charge of $1.2bn related to the divestment of its Russian arm to its previous licensee.

Last month, McDonald’s also agreed to pay approximately $1.3bn to settle a tax investigation in France.

Excluding the above-mentioned charges, the American fast-food giant earned $2.55 per share.

For the second quarter of 2022, which ended 30 June, McDonald’s revenues declined by 3% from $5.89bn a year ago to $5.72bn now.

McDonald’s global same-store sales registered a jump of approximately 10% during the quarter.

In the US market, sales increased by 3.7% while the International Operated Markets segment witnessed an improvement of 13%.

The restaurant chain reported a 16% increase in the International Developmental Licensed Markets segment during the second quarter.

Digital systemwide sales in its top six markets exceeded $6bn in the period, which represents nearly a third of total systemwide sales.

The company’s consolidated operating income decreased by 36% from $2.69bn in the second quarter of 2021 to $1.71bn in the latest quarter.

McDonald’s president and CEO Chris Kempczinski said: “The McDonald’s System continues to demonstrate strength and resiliency. Our second quarter performance reflects outstanding execution against our ‘Accelerating the Arches’ strategy.

“By focusing on our customers and crew, enabled by a rapidly growing digital capability, we delivered global comparable sales growth of nearly 10%.

“Nonetheless, 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.”

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