McDonald’s Corp sales declined for the first time since 2020 in the second quarter, falling short of analyst expectations for modest growth.
The chain’s comparable sales, a metric tracking restaurants open for more than a year, fell 1 percent from the previous year. Sales declined in each of McDonald’s geographic segments. In the US, the trend was driven, in part, by a drop in foot traffic.
McDonald’s sales growth has slowed this year as diners worldwide cut back on Big Macs, pinched by years of price increases and tight household budgets.
Photo: AFP
At the end of last quarter, the fast-food purveyor launched a US$5 meal deal in the US to convince diners that it is still an affordable option. Early results suggest it is drawing customers, although any sales boost would not be apparent until later this year.
McDonald’s has also introduced limited-edition menu items hoping to lure customers, such as a bacon cajun McCrispy and a “grandma” McFlurry.
The chain would remain focused on “reliable, everyday value” as diners become more discriminating with their spending, a statement quoted chief executive officer Chris Kempczinski as saying.
Other strategic priorities include the chain’s chicken lineup and its loyalty program.
Outside the US, boycotts over the Israel-Hamas war continue to hit sales in the segment that includes the Middle East. The company has previously warned that the slump would continue until the conflict is resolved.
McDonald’s also reported same-store sales declines in China and France.
System-wide sales, a metric that includes business at new restaurants, also took a downturn, suggesting openings were not offsetting weakness in existing units.
The burger chain is in the middle of an ambitious expansion plan, aiming to have 50,000 locations around the world by 2027, up from about 42,000 at the start of this year.
Quarterly revenue was flat at US$6.5 billion and just off the US$6.6 billion that Wall Street was expecting, analysts polled by FactSet said.
The company’s net income fell 12 percent to US$2 billion, or US$2.80 per share. Excluding one-time items such as restructuring charges, McDonald’s earned US$2.97 per share. That was far from the per-share profit of US$3.07 that industry analysts had forecast.
Additional reporting by AP
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