McDonald’s Corporation (NYSE:MCD) Q4 2022 Earnings Call Transcript

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Christopher J. Kempczinski: Yes. So focusing just on the U.S., I think what we saw from a performance standpoint was very balanced growth across the dayparts. So nothing particularly noteworthy there. Late night for us continues to be the opportunity just because of some changes that we’ve made around operating hours due to the staffing environment. But around kind of our core dayparts, that’s been very strong. We’re also seeing strong growth on our core menu, particularly on chicken, where we’ve been gaining share quite a bit of share on chicken. We’ve gained about a point of share on chicken in the last year. And then if you think about beef, we’re also continuing to grow our share in beef despite having a very strong presence in that already.

So nice balanced growth with the U.S. Digital and delivery, of course, are driving outsized growth. So digital, if you look at digital transactions, up close to 40% in the U.S., which is above obviously the 25% — or the 10%, rather, growth that we saw in Q4. And then on the low-income consumer I’d say the only thing that is probably noteworthy there is while the units per transaction is maybe down slightly, we’re seeing a little bit of an uptick in frequency of visits. And so I think that’s maybe something where the customer is coming in, being a little bit more cautious about how much they’re ordering. They’re probably spending to an absolute dollar amount, but we’re seeing a little bit of an improvement around frequency with that low-income consumer.

Ian F. Borden: Maybe just I’ll hook on a couple of additional kind of pieces of texture. I mean, I think if you look at the full year in the U.S., we were up about 10% from an average pricing standpoint. And as Chris talked about a little bit earlier, a couple of partial offsets to that. One is we continue to kind of see this reversion of order channels more to the kind of pre-COVID behavior. So of course, while delivery is still elevated, it’s come back a little bit as customer’s kind of revert to more typical ordering channels. And then as Chris also touched on, you’ve got that — maybe that more value-conscious discerning kind of choice making that consumers are making. I think two things that are really important. I mean value for money and affordability, which we’ve already talked to, we know we’re in a really strong leadership position in the U.S. business.

And I think the second thing is that on a comp basis, we continue to gain share. And I think those are both strong proof points of the fact that we’re well positioned and the fact that we are in a position to ensure that we are affordable and accessible for our consumers despite their individual circumstances as we go forward.

Mike Cieplak: Next question is from Dennis Geiger with UBS.

Dennis Geiger: Thank you. Chris, following all the momentum in 2022 and really in recent years, could you talk a bit more about the biggest opportunities that you see as it relates to continuing to drive that guest count momentum in 2023 and perhaps beyond? I don’t know if it’s the same in the U.S. as key global markets, but just curious how you’d kind of think about or rank order some of the opportunities that you’ve spoken to on the call? Thank you.

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