Surging sales at McDonald's offsets trouble in China, Russia

US menu prices and easing COVID-19 restrictions elsewhere helped McDonalds offset troubled markets like China and Russia in the first quarter.Revenue rose 11 per cent to USD5.66 billion in the January-March period, topping Wall Street expectations of USD5.57 billion, according to analysts polled by FactSet.The Chicago burger giant announced in early March that it would temporarily close 850 stores in Russia.

US menu prices and easing COVID-19 restrictions elsewhere helped McDonald's offset troubled markets like China and Russia in the first quarter.

Revenue rose 11 per cent to USD5.66 billion in the January-March period, topping Wall Street expectations of USD5.57 billion, according to analysts polled by FactSet.

The Chicago burger giant announced in early March that it would temporarily close 850 stores in Russia. It continues to pay its 62,000 employees in the country. It also closed 108 restaurants in Ukraine in February and is paying its employees there as well.

McDonald's has said it expects to lose USD50 million per month in sales from the Russian store closures alone.

McDonald's spent USD27 million on salaries, leases and supplier payments in Russia and Ukraine during the quarter. The company also said it has USD100 million worth of inventory it will probably dispose of since its restaurants are closed.

Excluding costs in Russia and Ukraine and other one-time items, McDonald's earned USD2.28 per share for the quarter, well ahead of analyst forecasts of USD2.17 per share.

Global same-store sales, or sales at stores open at least a year, rose nearly 12 per cent for the quarter. The easing of COVID restrictions in many markets, including the United Kingdom, France and Brazil, boosted sales, McDonald's said.

In the US, same-store sales rose 3.5 per cent. China reported negative same-stores sales as it struggled with a COVID resurgence and new restrictions.

Shares of McDonald's Corp. edged higher before the opening bell on Thursday.