McDonald’s (NYSE: MCD) plunged over 2.56% to $263.95 in pre session on Tuesday as more customers dined at its eateries, India-based franchisee Westlife Foodworld Ltd. announced a 74% increase in third-quarter earnings on Tuesday. The business, which has the McDonald’s Corp. licensed in west and south India, recorded a consolidated net profit after tax of 363.5 million rupees ($4.43 million) for the December quarter, up from 208.2 million rupees a year earlier.
Online orders are included in Westlife’s on- and off-premises operations, which saw growth of 42% and 12%, respectively. Analysts claim that the holiday season has witnessed an increase in demand for quick service restaurants (QSR), particularly in the months of October and December.
Westlife’s stock increased by 40% in 2022, and it increased by over 6% on Tuesday. Despite the fact that costs were high and expenses increased by 26% for the quarter, operating margin increased to 23.8%.
To 6.1 billion rupees, total sales for the quarter increased 28%. Due to increased dine-in demand, rival Jubilant Foodworks, which operates the Domino’s Pizza network of restaurants in India, reported a 10% increase in earnings in the preceding quarter. Results for the third quarter will be announced by the corporation on Wednesday.
Investors are keeping an eye out for indications of a recession following record inflation last year when the earnings report is released. If more low-income diners choose McDonald’s instead of more expensive eateries, as they did in the third quarter, the fast food chain might profit.
In the results announcement, Chief Executive Officer Chris Kempczinski stated that the business anticipates “short-term inflationary pressures to remain in 2023.”
According to information from location analytics company Placer.ai, visits to McDonald’s restaurants in the United States increased 26% in the fourth quarter of 2019 compared to the same period in 2018 and by over 30%. In contrast, the overall fourth-quarter sales of fast food decreased by 0.6% from the same period the previous year.
Starbucks Corporation (NASDAQ: SBUX) Is Changing Its Loyalty Program
The coffee chain giant, Starbucks Corporation (NASDAQ: SBUX) is changing its loyalty program, and reports of angry customers abound in the media. Their major point of contention is that, as on February 13, 2023, obtaining a complimentary cup of hot coffee will need twice as many of the program’s reward points, known as stars. There is frequently a big customer backlash when businesses cut back on their incentive programs. In the fall of 2022, Dunkin’ made it more difficult to receive free things through their rewards program, which also caused customer resentment. This was a recent example in the coffee sector.
In December, Starbucks announced modifications to the rules governing its rewards program, affecting the “price” of several of its goods. The price of a cup of ordinary, hot coffee or tea would increase from 50 stars to 100 stars, which attracted the greatest attention.
