The strength of the dollar and the exit of Russia make McDonald's revenue fall by 5%

Price increases are allowing McDonald's to boost sales in an environment of inflation.

However, for such a globalized company, the strength of the dollar is noticeable in its accounts.

The income of the American group of restaurants fell 5% in the third quarter of the year, to 5,872 million dollars (a similar figure in euros) as reported by the company to the supervisor on Thursday.

Had it not been for the exchange rate impact, they would have grown by 2%, says the company.

And comparable sales, which exclude, among other factors, the exit from Russia, are up almost 10%.

The benefit, for its part, fell 8%, to 1,981.6 million dollars, also due to the strength of the dollar, which means that sales in local currencies are reduced when expressed in dollars.

At constant exchange rates, the decline would have been just 1%.

Still, that profit beat analysts' expectations, who had expected Russia's exit, inflation and rising costs to further dent profitability.

In the accumulated figure for the first nine months of the year, turnover still increased by a minimum 0.2%, to 17,256 million, but profit fell 23%, to 5,906.4 million, precisely due to the extraordinary results derived from the exit of Russia, with the sale of the business to its local partner, which involved a charge of 1,281 million dollars before taxes.

The company has also recorded an expense of 537 million for a tax inspection in France (the non-provisioned part of the fine imposed in June) and a capital gain of 271 million for the sale to Mastercard of its Dynamic Yield business.

business strength

If what you look at are the sales that the group defines as comparable, they grow by 9.5%.

In the United States they increased by 6% due to the rise in menu prices and the increase in customers looking for cheap alternatives to eat out in a context of inflation.

“Successful marketing promotions with the main menu and continued digital and cast growth contributed to the positive results,” the company says.

In the international markets where the company owns the businesses, strong growth in Germany, Australia and France allowed sales to grow by 8.5%.

And in those that operate under license, the increase was 16.7% due to the strong pull of sales in local currency from Brazil and Japan and despite the burden caused by the restrictions due to the pandemic in China.

The company has been gradually reopening its stores in Ukraine.

"Our performance in the third quarter of 2022 demonstrated broad business momentum, as global comparable sales increased nearly 10%," said McDonald's Chief Executive Officer Chris Kempczinski.

“As the macroeconomic landscape continues to evolve and uncertainties persist, we are operating from a position of competitive strength.

I also want to thank our franchisees, who have done a tremendous job navigating this environment while providing great value to our customers,” he added.