Higher U.S. prices and celebrity-themed meals boosted quarterly comparable sales at McDonald’s Corp, though the company struggled to keep restaurants open at full capacity amid labor shortages and COVID-19 outbreaks, it reported on Wednesday.
U.S. same-store sales grew 9.6% in the third quarter ended Sept. 30, compared with estimates for 8.27%, according to Refinitiv IBES data.
Global comparable sales also jumped 12.7% in the quarter versus estimates of 10.31% as international markets slowly recovered from the pandemic.
Shares in the world’s largest burger chain rose about 2.2% to $241.70 in late morning trading.
The U.S. labor shortage caused some locations to close early and lose speed of service, Chief Executive Chris Kempczinski said in an earnings call, adding problems were not “unsolvable.”
McDonald’s has had to push back some new restaurant openings into early 2022 in part because global supply-chain problems made it difficult to get kitchen and tech equipment. That caused new unit development in the United States and some international markets to be “down a little bit” from how many the company had expected to open this year, Kempczinski said.
Seating areas remained closed in about 20% of McDonald’s American locations – roughly 3,000 restaurants – in regions with high rates of COVID-19.
Even so, some pandemic-related restrictions have eased, luring more customers into restaurants. McDonald’s crispy chicken sandwich and latest celebrity partnership with rapper Saweetie also boosted sales.
The Chicago-based company has also raised U.S. prices about 6% versus 2020 to help cover rising commodity and labor costs. Higher prices, combined with larger order sizes, drove sales.
Most restaurant chains, including Chipotle Mexican Grill Inc, are charging more on menus to protect their margins against higher costs for everything from payroll to beef and chicken.
McDonald’s forecast current-quarter U.S. comparable sales to post low double-digit growth on a two-year basis.
The fast-food chain, which has been seeking to grow sales digitally, launched a new loyalty program in the United States that now has over 21 million members enrolled, while also doubling down on advertising.
Most of the company’s international markets also returned to sales growth, especially the UK, Canada and Japan, as coronavirus-related restrictions eased, while Australia and China sales continued to be pressured by the resurgence of COVID-19 cases.
Kempczinski said IBM Corp will acquire McD Tech Labs, which was created after McDonald’s 2019 acquisition of Apprente, an artificial intelligence company working on automating drive-thru orders.
Net income rose 22% to $2.15 billion and the company earned $2.76 per share on an adjusted basis, beating estimates of $2.46 per share.
(Reporting by Aishwarya Venugopal in Bengaluru and Hilary Russ in New York; Editing by Shounak Dasgupta and Bernadette Baum)
S&P/TSX composite falls to end a third-straight losing week on angst about Fed – CP24 Toronto's Breaking News
TORONTO – The rebound in Canada’s main stock index was short-lived as it pushed lower Friday to end a third-consecutive losing week amid concerns about impending action by the U.S. Federal Reserve.
The S&P/TSX composite index closed down 128.76 points to 20,633.27 despite hitting an intraday high of 20,825.21. The Toronto market had a strong morning start after posting its best performance in 10 months Thursday. It then lost ground throughout the session before recovering a bit approaching the close.
The TSX was down 2.3 per cent on the week but is up 18.4 per cent so far in 2021.
In New York, the Dow Jones industrial average was down 59.71 points at 34,580.08. The S&P 500 index was down 38.67 points at 4,538.43, while the Nasdaq composite was down 295.85 points or 1.9 per cent at 15,085.47.
Investors have been jittery this week in response to the more hawkish comments from the U.S. central bank around speeding up the tapering of bond purchases at the same time as a new COVID-19 variant has surfaces and economic activity is slowing, said Greg Taylor, chief investment officer of Purpose Investments.
“The risk this week is around the Fed making a policy error,” he said in an interview.
Taylor said investors have been nervous in the last few days about the Fed taking away stimulus while the economy in the rest of the world slows down a little bit.
Canadian markets have been somewhat insulated by strong bank earnings.
The heavyweight financials sector was slightly lower on the day, led by a 4.4 per cent drop by Canadian Western Bank. That was partially offset with BMO and CIBC rising 2.4 and 2.1 per cent, respectively, as the Canada’s big banks wrapped up strong quarterly reports that saw them each boost dividends.
Telecommunications was the only sector on the TSX to close higher on Friday.
The broad-based decrease on the TSX was led by health care and the technology sector, which sustained even stronger declines in the U.S.
Tech dropped 2.5 per cent as shares of Hut 8 Mining Ltd. fell 10.8 per cent while Lightspeed Commerce Inc. was down 7.7 per cent and Shopify Inc. was 2.4 per cent lower.
There was a disconnect in the sector’s movement because bond yields were weaker, which is typically a supportive move for these companies.
Big tech stocks have really come under pressure in the last few days as previous pandemic winners such as DocuSign Inc. suffered a 42 per cent decline, Taylor said. 42.2
After starting the day higher, energy lost 0.3 per cent as crude oil prices fell.
The January crude oil contract was down 24 cents at US$66.26 per barrel after climbing as high as US$69.22 in the morning. The January natural gas contract was up 7.6 cents at US$4.13 per mmBTU.
Suncor Energy Inc. and Cenovus Energy Inc. led the declines, losing 2.1 and 1.7 per cent, respectively.
The Canadian dollar traded for 78.05 cents US compared with 78.03 cents US on Thursday.
Materials also fell as copper prices softened while gold was stronger as shares of Lithium Americas Corp. lost 8.7 per cent.
The February gold contract was up US$21.20 at US$1,783.90 an ounce and the March copper contract was down 3.2 cents at nearly US$4.27 a pound.
Earlier, the United States and Canada posted November employment numbers. U.S. non-farm payrolls disappointed as they increased by 210,000 jobs, far below forecasts for about 550,000 jobs. However the unemployment rate fell to 4.2 per cent, the lowest since February 2020.
In Canada, the jobless rate fell to six per cent as 153,7000 jobs were added as the share of the core working population with a job climbed to an all-time high.
Taylor said markets were at risk coming into the week.
“We haven’t had a correction in a long time and were due for some volatility. The question will be when will buyers step back in.”
This report by The Canadian Press was first published Dec. 3, 2021.
Companies in this story: (TSX:CVE, TSX:SU, TSX:CWB, TSX:CM, TSX:BMO, TSX:HUT, TSX:LSPD, TSX:SHOP, TSX:LAC, TSX:GSPTSE, TSX:CADUSD
Google real estate executive says 5% more workers coming in to office each week
Alphabet Inc’s Google has seen an increasing number of employees coming in to its offices each week, particularly younger workers, the company’s real estate chief said during an interview at the Reuters Next conference on Friday.
On Thursday, Google indefinitely pushed back the mandated return date for employees due to concerns about the Omicron variant. The company had previously said its 150,000 global employees could be required to come in to the office as soon as Jan. 10.
Nevertheless, David Radcliffe, Google’s vice president for real estate and workplace services, said many Googlers are returning of their own volition. About 40% of its U.S. employees on average came in to the office daily in recent weeks, up from 20-25% three months ago, he said. Globally, 5% more employees are returning to offices week after week, he added.
“People are actually showing voluntarily that they want to be back in the office,” Radcliffe said. “We’re moving in the right direction.”
Younger employees and those who joined Google more recently have been coming in at higher rates, seeking opportunities to learn from colleagues, Radcliffe added.
Google expects workers in the office at least three days a week once it mandates a new return date.
Based on feedback from those already back, it is redesigning floor plans to increase private, quiet spaces for distraction-free individual work and adding conferencing and other collaboration areas in open spaces both indoors and outdoors.
Real estate and human resources experts have considered Google a trailblazer for the past 20 years in sustainable office design and variety of workplace perks, including free meals, massages and gyms.
To extend those sustainability and wellness benefits to remote work, Google has encouraged employees to buy carbon offsets and non-toxic furniture for their home offices. It also has provided free cooking classes and discounts to fitness studios near workers’ homes.
“It was amazing how many employees had really never cooked themselves,” Radcliffe said.
(Reporting by Paresh Dave in Oakland, Calif., and Julia Love in San Francisco; Editing by Sonya Hepinstall and Matthew Lewis)
S&P/TSX composite down nearly 200 points, U.S. stock markets also lower – Business News – Castanet.net
Canada’s main stock index was down nearly 200 points in late-morning trading, led lower by losses in the technology, base metal and industrial sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 176.86 points at 20,585.17.
In New York, the Dow Jones industrial average was down 160.83 points at 34,478.96. The S&P 500 index was down 48.14 points at 4,528.96, while the Nasdaq composite was down 341.27 points at 15,040.05.
The Canadian dollar traded for 78.05 cents US compared with 78.03 cents US on Thursday.
The January crude oil contract was up US$1.54 at US$68.04 per barrel and the January natural gas contract was up eight cents at US$4.14 per mmBTU.
The February gold contract was up US$14.90 at US$1,777.60 an ounce and the March copper contract was down two cents at US$4.28 a pound.
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