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Investing.com – McDonald’s stock (NYSE:MCD) fell 1% Thursday after pandemic-led higher costs and temporary store closures kept the company’s fourth-quarter sales and earnings behind estimates.
“Covid-19 continued to result in varying levels of government restrictions on restaurant operating hours, limited dine-in capacity and, in some cases, dining room closures,” McDonald’s said.
Restrictions were tightest in key markets such as China, Australia and India.
Sales in China contracted as some cities banned dining in restaurants to control fresh Covid outbreaks ahead of February’s Winter Olympics in Beijing. Australia revenue was relatively flat.
Sales were higher in the U.S., U.K. and other European markets such as Italy, Germany and France.
Price hikes and launch of special menu items like McRib and Crispy Chicken Sandwich led comparable sales higher by 7.5% in U.S, its biggest market. This compares with 5.5% increases in the 2020 December quarter.
On a full-year basis, operating costs surged 14%, matching the annual growth in revenue as the company had to raise its wages to attract and retain workers at a time of severe labor crunch.
McDonald’s expects its operating margin in 2022 to be in the low- to mid-40% range, compared with 43.4% last year, excluding some items, according to Bloomberg.
Overall revenue in the fourth quarter rose 13%, to $6 billion. Adjusted profit per share rose 31% to $2.23, boosted by gains from the sale of McDonald’s Japan stock.
