Adult Happy Meals, McRib, feed McDonald's sales in fourth quarter

Adult Happy Meals and other limited-time promotions boosted traffic at McDonald's restaurants during the fourth quarter despite higher prices.

Global same-store sales or sales at stores open at least a year rose 12.6% in the October-December period, the Chicago company said Tuesday. That beat Wall Street expectations for an 8.8% increase, according to analysts polled by FactSet. U.S. same-store sales rose 10.3%.

Sales soared in October after McDonald's launched adult Happy Meals featuring limited-edition toys designed by the streetwear brand Cactus Plant Flea Market. Half of the toys for those meals were gone in the first four days of the promotion, CEO Chris Kempczinski said earlier.

A "farewell tour" for the cult favorite McRib sandwich drew in more customers in November.

Strong sales at home helped overcome weakness in China, where stores were impacted by government COVID-19 restrictions.

Fourth quarter revenue fell 1% to $5.9 billion, but that still beat analysts expectations for $5.7 billion. Overseas revenue was weaker because of the strong dollar; 60% of McDonald's sales come from outside the U.S.

Net income rose 16% to $1.9 billion, or $2.59 per share, topping profit projections by 13 cents.

McDonald's shares rose slightly in premarket trading.

Kempczinski said in a prepared statement that higher inflation will continue to pressure the company this year. The company had said it expects food and paper costs to be up 12% to 14% in 2022, while its labor costs would rise 10%.

In early January, the company announced a corporate restructuring designed to improve efficiency and accelerate new restaurant openings. McDonald's said the plan will likely include corporate layoffs; it told employees it would share more details by April 3.