McDonald’s did not meet its fourth-quarter sales target for the first time in four years.
Wall Street expected a 4.7% increase. McDonald’s global comparable sales only increased 3.4%.
The company blamed the Israel-Hamas war because international sales went down, especially in the Middle East.
The Middle East boycotted McDonald’s after assuming it supports Israel. From The Associated Press:
Customers in the Middle East were angered after McDonald’s Israel – which is operated by a local franchisee — announced in October it was providing free meals to Israeli soldiers. In response, some franchisees, like McDonald’s Oman, announced donations to relief efforts in Gaza. Sales have since dropped in Muslim-majority countries like Malaysia and Indonesia as well as countries with large Muslim populations like France.“So long as this conflict, this war, is going on… we’re not expecting to see any significant improvement in this,” [CEO Chris] Kempczinski said. “It’s a human tragedy, what’s going on, and I think that does weigh on brands like ours.”
Sales in America increased 4.3% in the fourth quarter, but Kempczinski noted the chain had “fewer visits and lower spending by customers earning $45,000 per year or less.”
Prices have gone up due to inflation. Prices will likely rise even more when states implement minimum wage increases. Or I bet the company will replace them with kiosks.
The low sales might explain why McDonald’s has already brought back the Shamrock Shake and the Oreo Shamrock McFlurry at a few restaurants.
I love McDonald’s. I want to get one of those Shamrock shakes!
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