McDonald’s and GM Boast Positive Q4 Earnings to End 2022 on a High Note

Ba Da Ba Ba Bah, McDonald’s is lovin’ their Q4 earnings.

The golden arches were shining bright when McDonald’s reported their fourth-quarter earnings results Tuesday, January 31, 2023. Mcdonald’s beat Wall Street expectations of $5.75 billion in revenue with a reported $5.93 billion. U.S. same-store sales were up, and McDonald’s adjusted earnings per share were $2.59 versus the $2.44 expected.

Higher menu prices helped drive McDonald’s Q4 success. A successful marketing collaboration with Cactus Plant Flea Market had customers lining up in the late fall for limited-time Adult Happy Meals. And the fan favorite, the McRib, made its limited return in Q4 to add to McDonald’s strong sales.

Things were also looking bright in Detroit, where GM smashed expectations for Q4 earnings with $33.58 billion in revenue to close out a strong 2022. Looking ahead to 2023, GM predicts a strong sales year as supply-chain issues resolve and inventory levels return to normal.

Nikolay Osadchiy, Associate Professor of Information Systems & Operations Management at Emory’s Goizueta Business School, offered some perspective on these positive Q4 earning results and the factors driving them.

Nikolay’s Thoughts

“Financial markets have been doing well recently, and there are several factors explaining that in my opinion. First, supply chain pressures are easing and trade flows are starting to normalize, so that’s definitely great news, and markets typically react well to supply chains working smoothly.

The second reason is that the American consumer is proving to be fairly resilient. Even though there are some recent cuts in consumer spending that are observed in the data, still, consumer spending remains pretty high. And the third, of course, is that inflationary pressures appear to be easing as well, and the speed of rate hikes by the Federal Reserve is decreasing.

So that said, when we start thinking about individual stocks, the picture is a little bit more nuanced. For example, General Motors recently announced earnings and they beat expectations, the stock price increased. To me, this is mostly the story of supply and demand, so there was lots of residual unmet demand, people wanted to buy cars, but they couldn’t because of various shortages of inventory, of semiconductor chips. Now that supply chains have caught up, people can finally buy cars, and that translates to GM revenue.

Compare that with McDonald’s, for example. McDonald’s in my opinion is really the story of consumer resilience in the face of higher prices. So, despite increased prices, consumers still buy McDonald’s products and that translates to their revenue. Third, just yesterday, Meta had announced earnings and they beat on revenue, but that to me is mostly a story of cost-cutting on Meta’s side and also share buybacks.

So there is a variety of reasons that contribute to market movements. Going back to supply chains, yes, financial markets value supply chains. They like supply chains operating smoothly without glitches, and certainly, that has been factored in, but at the same time, there are a couple of other very significant factors in play, such as inflation, such as consumer spending, rising prices, and Fed policy. So what the net effect is going to be, remains to be seen.”

Follow us on social media for the latest updates in B2B!

Latest

digital court reporting
Stenograph’s MAXScribe™ to Become the Primary Software for Key College Digital Reporting Program
March 20, 2023

DOWNERS GROVE, Ill., March 20, 2023 (Newswire.com) – Stenograph®, LLC announces a partnership with Key College to further its support of court reporter education. Key College has named Stenograph’s digital court reporting software, MAXScribe, the primary software of its Digital Court Reporting Certificate Program. To help prepare students for AAERT Certifications such as CER, CET, and CDR, […]

Read More
AI influencers
Marketing Professionals Say AI Influencers are Here to Stay
March 20, 2023

Let’s talk about AI influencers. You may have heard about Miquela Sousa, the 19-year-old Brazilian-American model and definitely not a real human getting ‘hacked’ in 2018 by a pro-Trump Influencer. No? What about Maybelline unveiling ‘May’, its own digital influencer created to sell mascara? Like it or not, AI influencers, or more concretely, animated […]

Read More
food industry's understaffing problem
The Food Industry’s Understaffing Problem: A Positive Change for Employees and Customers
March 20, 2023

The food industry is known for its fast-paced, high-stress environment. However, in recent times, the food industry’s understaffing problem has made things much more challenging! The food industry is feeling the pinch of understaffing, with over 60% of establishments admitting they are struggling to recruit enough employees. In spite of that, this challenge has […]

Read More