McDonald’s (NYSE:MCD) on Thursday reported better-than-expected earnings and revenue, fueled by price hikes in the U.S. and strong international sales growth.
But the war in Ukraine and inflation in the fast-food giant’s home market loomed large over its quarterly report. CEO Chris Kempczinski said that the conflict hasn’t affected consumer behavior across the rest of Europe yet, but some U.S. consumers are shrinking their orders or buying cheaper items.
Shares of the company rose early Thursday by $3.28, or 1.3%, to $250.42.
Earnings per share proved to be $2.28 adjusted, better than the expected $2.17. Revenue came in at $5.67 billion vs. $5.59 billion expected
The fast-food giant reported first-quarter net income of $1.1 billion, or $1.48 per share, down from $1.54 billion, or $2.05 per share, a year earlier.
The company spent $27 million to pay for leases, employee wages and supplier costs in Russia and Ukraine after suspending its operations in both of those countries due to the war.
McDonald’s reported an additional $100-million charge for inventory in its supply chain that will likely spoil because of the temporary closures of its restaurants in Ukraine and Russia. Altogether, those costs dragged its earnings down by 13 cents per share.
The company also said that it has reserved $500 million, or 67 cents per share, for a potential settlement related to an international tax matter, but it did not share more details.