How Much Money You Would Have If You Invested $1,000 Into McDonald’s Stock 10 Years Ago

A sign is shown in front of an McDonald's restaurant in Pittsburgh on Saturday, April 23, 2022. The Chicago-based company said, Tuesday, July 26, it had net income of $1.60 per share. Earnings, adjusted for non-recurring costs, came to $2.55 per share. The results surpassed Wall Street expectations. AP Photo/Gene J. Puskar

Higher menu prices and customer visits boosted McDonald’s Corp. quarterly profit and sales above Wall Street estimates on Tuesday, but shares fell when the burger chain warned inflation will weigh on margins in 2023.

“Overall, the consumer, whether it’s in Europe or the U.S., is actually holding up better than ... what I would have expected a year ago or 6 months ago,” Chief Executive Officer Chris Kempczinski said during a call with investors, Reuters reported.

Shares of the burger chain fell about 2.6 percent to $263.84 in U.S. trading, after gaining about 6 percent in the last 12 months. Investors are watching bellwethers like McDonald’s for any signs its customers are paring back spending. Consumer demand is key to determining whether the Federal Reserve’s monetary tightening will help cool the U.S. economy without causing a recession.

Despite this week’s drop, calculations published by CNBC show how much people would have made if they invested $1,000 into McDonald’s 10 years ago and before.

If one had invested $1,000 into McDonald’s when the stock was worth $94.67 closing share price on Jan. 30, 2013—and allowed it to grow—that investment would have been worth about $3,270 today, the analysis shows. That’s based on the $256.09 closing share price on Jan. 30, 2022.

If the same amount was invested on Jan. 30, 2018, when the stock was worth $172.48, that would be worth $1,695 today, the analysis shows.

And if one invested $1,000 into McDonald’s on Jan. 30, 2022—a year ago—they would have about  $1,066 today.

Recession?

Despite the gains, Kempczinski said Tuesday that McDonald’s still expects a mild to moderate U.S. recession this year, with a deeper, longer recession in Europe. McDonald’s is the first major global restaurant brand to report quarterly earnings so far this year.

Like other fast-food chains, Chicago-based McDonald’s raised the prices of its burgers and fries last year to keep up with surging commodity and labor costs.

The price hikes did not deter business. Traffic rose 5 percent for full-year 2022, McDonald’s disclosed on Tuesday, as its meals remained less expensive than many competitors, drawing low-income customers.

Kempczinski also stated that his firm believes that relatively high inflation will stick around in the near term. The most recent data released by the Department of Labor show the Consumer Price Index declined 0.1 percent year-over-year in December 2022, as headline rates rose 6.5 percent from a year ago.

“While we expect short-term inflationary pressures to continue in 2023, we remain highly confident in Accelerating the Arches, which now includes a greater emphasis on new restaurant openings,” he said in a news release.

A Big Mac in New York City now costs about $5.39, or less than a $5.65 Venti Cappuccino at a nearby Starbucks. Low-income customers are spending less with each McDonald’s visit, but eating there more often, Kempczinski said.

By the third quarter, McDonald’s menu prices were 10 percent higher than the year before. It did not provide an update on higher menu prices on Tuesday.

The fast-food chain launched its Cactus Plant Flea Market Box, marketed as an adult version of its Happy Meal for kids, with menu items including its Big Mac and Chicken McNuggets, helping it post better-than-expected U.S. sales.

Reuters contributed to this report.