Coca Cola and McDonald’s raise prices but customers digest them well
Raw material price hikes have also forced Coca Cola and McDonald's to raise prices, however, so far their business does not seem to be affected. All the details
Despite price hikes over the past year to mitigate inflation, particularly after Russia's invasion of Ukraine sent commodity prices soaring, customers are not cheating on McDonald's or Coke. Indeed, both US giants beat analysts' expectations on quarterly sales and earnings.
MCDONALD'S RECORDS
Although McDonald's price hikes are driving smaller menu orders in some markets, shares hit a new 52-week high yesterday and the company is up about 10% this year, CEO Chris Kempczinski said. %.
In addition, the fast-food chain topped Wall Street estimates for first-quarter earnings and revenue, thanks to rising demand as well as rising prices. Specifically, it reported first-quarter net income of $1.8 billion, or $2.45 per share, up from $1.1 billion, or $1.48 per share, in the first quarter. last year. Group revenues totaled $5.9 billion, up 4% from the same period in 2022.
The company estimated restructuring charges related to the termination of leases and employee layoffs at $180 million, according to chief financial officer Ian Borden. In fact, at the beginning of April, hundreds of employees were fired.
BUSINESS OUTSIDE THE USA
But even outside the United States, McDonald's has had better-than-expected sales. International markets, which include the UK, France, Germany and Australia, beat StreetAccount 's estimates, which predicted an 8.5% increase in same-store sales, to 12.6%.
In addition, the development licensed international markets segment, which includes China and Japan, exceeded same-store sales expectations by 10.5 percent.
FORECAST FOR THE FUTURE
However, Kempczinski said that "the company is starting to see some resistance to price hikes in many markets," which "reminds us that we need to remain very disciplined about pricing."
EVEN COCA-COLA CELEBRATES
Coca-Cola also reported quarterly earnings and revenue on Monday that exceeded analysts' expectations, as a result of higher demand for drinks, despite rising prices.
The U.S. multinational, reports CNBC , reported first-quarter net income attributable to shareholders of $3.11 billion, or 72 cents per share, compared with $2.78 billion, or 64 cents per share, for the year. previous. Net sales increased 5% to $10.98 billion as organic revenue, excluding the impact of acquisitions and divestitures, grew 12% for the quarter.
THE PRODUCTS THAT GET BETTER AND WORSE
Notably, Coca-Cola reported volume growth of 3% for its sparkling soft drinks unit. Its namesake soft drink also saw 3% growth, while Coke Zero Sugar volume increased 8%.
The Water, Sports, Coffee & Tea division reported volume growth of 4%, driven primarily by strong demand for coffee and bottled water.
The earthquake in Turkey , on the other hand, hurt demand for tea, the volume of which decreased by 3% in the quarter. Volumes of sports drinks, including Bodyarmor and Powerade, have also declined.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/primo-piano/coca-cola-e-mcdonalds-aumentano-i-prezzi-ma-i-clienti-li-digeriscono-bene/ on Mon, 01 May 2023 05:55:36 +0000.