McDonalds profit failed to meet expectations
While same-store sales in the market group that includes restaurants in the Middle East of McDonald’s, the US fast-service restaurant chain that became the target of boycotts due to Israel’s attacks on Gaza, decreased, the company’s profit remained below expectations.
McDonald’s announced its balance sheet for the first quarter of 2024.
According to the statement made by the company, McDonald’s revenue increased by 4.6 percent in the first quarter of the year compared to the same period last year, reaching 6.17 billion dollars. The company generated approximately $5.9 billion in revenue in the same quarter of 2023.
While the restaurant chain’s store sales increased by 1.9 percent, it could not meet market expectations of a 2.1 percent increase.
Sales in the “International Enhanced Licensed (IDL) Markets” group, where McDonald’s has licensed its franchise rights to strategic partners, showed a negative performance due to the continuing impact of the war in the Middle East.
While the company’s sales in this group decreased by 0.2 percent, there was a decrease in McDonald’s sales in a market group for the first time since the Covid-19 outbreak. McDonald’s net profit increased by 7 percent in the first quarter, reaching 1.9 billion dollars.
The company made a profit of $1.8 billion in the same period last year.
Although the company’s profit per share, which was 2.45 dollars in the first quarter of last year, increased to 2.66 dollars in the first quarter of 2024, it remained below market expectations.
Consumer pressures continue
McDonald’s Chief Executive Officer (CEO) Chris Kempczinski stated at the investor conference held after the announcement of the company’s balance sheet that broad-based consumer pressures continued around the world in the first quarter of the year.
Stating that consumers continue to be more selective about every dollar they spend as they encounter high prices in their daily expenses, Kempczinski emphasized that this puts pressure on the quick service restaurant industry.
The company’s Chief Financial Officer (CFO) Ian Borden also noted that the positive sales in the IDL group in Japan, Europe and Latin America were balanced by the impact of the ongoing war in the Middle East.
McDonald’s IDL market group also includes restaurants in the Middle East affected by boycotts.