After Adding Tempting Socks and Selling 50 Million Pairs... Value-for-Money McDonald's Earnings Soared

Beating Market Expectations... Revenue Up 10% Year-on-Year
McDonald's CEO: "Value Management... Listening to Customers"

McDonald's delivered stronger-than-expected earnings in the fourth quarter of last year by pursuing a value-for-money strategy amid high inflation, winning positive responses from consumers. As the economy slows and inflation weighs on households, shrinking family budgets are making "price" the key criterion for consumption among U.S. consumers.

Socks included in the McDonald's Grinch set

On the 11th (local time), McDonald's announced that its adjusted earnings per share for the fourth quarter came to 3.12 dollars, beating the market consensus of 3.05 dollars. Revenue reached 7.0 billion dollars, also exceeding expectations of 6.84 billion dollars.

McDonald's net income was 2.16 billion dollars (3.03 dollars per share), and if restructuring costs and other items are excluded, the improvement in earnings was even greater. Revenue increased 10% year-on-year.

McDonald's explained that strengthening its value-for-money strategy led directly to the improvement in results. Chris Kempczinski, Chief Executive Officer (CEO) of McDonald's, said that by focusing on discount promotions, the company was "able to increase its share of lower-income customers."

At the same time, the company is accelerating menu innovation. This year, it plans to launch energy drinks, fruit refreshers, and craft sodas in the United States and selected overseas markets. The idea is to increase both visit frequency and average spending per customer through a beverage strategy targeting younger consumers. McDonald's is also strengthening its chicken offerings, which are very popular among U.S. consumers. In some restaurants, it is test-selling chicken strips, wings, and grilled sandwiches.

McDonald's Grinch Set

Since 2024, McDonald's has focused on restoring its image as a place for "affordable meals." It launched a 5-dollar value meal and worked with U.S. franchisees to lower the prices of set menus. Last year, it concentrated on buzzworthy promotions such as a limited-time menu tied to the "Monopoly Game" and to the Dr. Seuss character "Grinch." In particular, the socks included in the Grinch set sold more than 50 million pairs in just a few days, leading to the highest single-day sales in the company's history.

Meanwhile, McDonald's announced plans to spend 3.7 to 3.9 billion dollars on capital expenditures this year. Most of the funds will be used to open 2,600 new restaurants. On a net basis, the company aims to add 2,100 locations, which it expects will boost total revenue by about 2.5%, excluding foreign exchange fluctuations.