McDonalds reported Q4 and full year 2021 earnings yesterday. While absolute sales and profit levels were higher in 2021 versus 2020, both sales and earnings missed analyst’s projections in Q4. Both food and labor costs have become a very difficult problem and McD is forecasting food and paper costs in the “high single digit to low double digit percentage increase range” in 2022. Labor rates rose 10% in 2021. The company also noted however that one-year SSS were plus 7.5% in Q4 while 2-year SSS (versus 2019) were plus 13.4%, with price up 6.0% in 2021. All dayparts were positive. They cited an improvement in closed hours, down to only 1% in January, as well as Chicken Sandwich and McRib product marketing. McDonalds cited record franchisee company “cash flow” (really just an EBITDA number–at $500,000, per our analyst John Gordon) and momentum to date with 21 million loyalty program active users.  One surprise noted was that drive thru service times had slowed up. Looking ahead will be the expanded test of the McPlant Burger as well as additional modernization of US units.