“McDonald’s Reports Mixed Quarterly Results Amidst Restructuring and Regional Challenges”
McDonald’s released its quarterly results on Tuesday, presenting a mixed picture as its restructuring efforts impacted profits and boycotts affected sales in the Middle East.
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Here’s a breakdown of the company’s reported figures compared to analysts’ expectations, according to a survey conducted by LSEG:
Earnings per share: Adjusted at $2.70, slightly below the anticipated $2.72.
Revenue: Came in at $6.17 billion, slightly exceeding the forecasted $6.16 billion.
For the first quarter, McDonald’s reported a net income of $1.93 billion, or $2.66 per share, up from $1.8 billion, or $2.45 per share, compared to the previous year. The company attributed a pre-tax charge of $35 million to its reorganization efforts, which were announced over a year ago.
Excluding restructuring charges, the fast-food giant achieved earnings of $2.70 per share.
Net sales saw a 5% increase to reach $6.17 billion. Despite this, global same-store sales only rose by 1.9% in the quarter, falling short of StreetAccount estimates of 2.1%.
In the U.S., same-store sales growth was reported at 2.5%, slightly below expectations of 2.6%. The company noted that higher menu prices contributed to an increase in the average check size, but also acknowledged a decline in low-income customers due to these price hikes.
Meanwhile, demand in McDonald’s international developmental licensed markets, including the Middle East, experienced a decline with same-store sales dropping by 0.2%. This marked the first such decline since the onset of the pandemic. The situation in the Middle East was exacerbated by the Israel-Hamas conflict and subsequent boycotts triggered by discounts offered to soldiers by McDonald’s Israeli licensee. McDonald’s responded by purchasing the 225 restaurants operated by its Israeli franchisee earlier this month.
On a more positive note, same-store sales in other licensed markets such as Japan and Latin America showed growth for the quarter. In the international operated markets segment, which includes Germany and the United Kingdom, same-store sales grew by 2.7%. However, France saw a decline in same-store sales during the quarter.
In summary, McDonald’s faced a mixed performance in its recent quarterly results, with challenges in certain markets offsetting growth in others.
