The latest earnings from McDonald’s left much to be desired as prices at checkout continue to grow.
Transcript:
Investors look ahead to Wednesday’s Fed decision and McDonald’s may finally be feeling the cost of higher prices. I’m Caroline Woods with TheStreet, those stories coming up.
I’m Caroline Woods reporting from the New York Stock Exchange — here’s what we’re watching on TheStreet today.
As investors digest the high profile tech earnings from Amazon and AMD, Wall Street is largely holding its breath ahead of Wednesday’s closely watched Fed decision on interest rates.
It’s all but guaranteed the central bank will hold rates steady with the CME FedWatch tool currently predicting a 97 percent chance they will do nothing this meeting. But investors will listen to every word Fed chair Jerome Powell says for clues on future decisions.
On the earnings front, McDonald’s reported mixed results as reorganization costs, Middle East boycotts and increasingly cash-strapped consumers weighed on profits.
McDonalds said same-store sales in the U.S. and globally fell short of expectations for the quarter as consumers worldwide increasingly pulled back on restaurant spending.
The chain’s CEO Chris Kempczinski said McDonald’s must be ‘laser focused’ on affordability. During the earnings call, he said, “Consumers continue to be even more discriminating with every dollar that they spend as they faced elevated prices in their day-to-day spending, which is putting pressure on the [quick-service restaurant] industry.”
While pricing may have pushed some customers away, the company said higher prices helped increase the average check per each order.
McDonald’s and its fast food competitors have steadily increased prices in response to inflation and rising material and labor costs.
The company came under fire earlier in 2024 after a Connecticut location sold its Big Mac Combo meal for 18 dollars.
McDonald’s has consistently maintained that pricing varies based on location and individual franchisee, and the company strives to balance pricing and value.
That’ll do it for your daily briefing — from the New York Stock Exchange, I’m Caroline Woods with TheStreet.
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