McDonald’s blames inflation for menu price increases
FILE - McDonald's sign. (Jeremy Moeller/Getty Images)
NEW YORK - McDonald's is being hurt by rising prices and higher labor costs. The company reported raising menu prices by about 6% last year.
The Burger chain reported that same-store sales rose 13.8% in the past year, which marked "the highest U.S. annual comparable sales ever reported" during an earnings call on Thursday.
But the earnings of $2.23 per share did not meet Wall Street expectations that were 11 cents a share higher.
The Golden Arches says growth was aided in part by the "strong menu and marketing promotions" for items like the McRib and Crispy Chicken Sandwich, which lured in customers even with higher menu prices, according to McDonald's.
The company also said same-store sales benefited from its loyalty program.
McDonald’s raised hourly pay for 36,000 U.S. employees at its company-owned restaurants last year. Franchisees own 93% of McDonald’s 40,000 restaurants worldwide, but several thousand stores are owned by McDonald’s.
McDonald's says it expects higher costs for food and paper to persist in the first half of this year.
Shortages have also been a problem for the company.
McDonald’s Japan said they began limiting medium and large-sized fries sales earlier in January because of supply constraints.
In August the company warned its restaurants to limit orders of bags because demand was rising and they were worried about running out of them.
The Associated Press and Fox Business contributed to this report.