McDonald's recorded the largest drop in sales since the pandemic
Kyiv • UNN
McDonald's reported a 1.5% decline in global sales in the third quarter due to weak demand in key markets. This is the second consecutive quarterly decline since Covid-19 in 2020.
McDonald's reported the second consecutive decline in sales in the third quarter due to weak demand in France, the UK, the Middle East and China. Global sales fell by 1.5%, exceeding analysts' forecasts. Writes UNN with reference to Financial Times.
In the third quarter, McDonald's suffered its second consecutive decline in sales due to weak consumer demand in international markets such as France, the UK, the Middle East and China. On Tuesday, the fast-food chain reported that global comparable sales decreased by 1.5% year-on-year, exceeding the forecast of Visible Alpha analysts who expected a decline of 0.6%.
This is the first consecutive drop in McDonald's sales since the Covid-19 pandemic in 2020, following a 1% decline in the second quarter as the chain tries to win back customers, especially low-income households that have been hit by prolonged food inflation. Revenue for the third quarter rose 3% to $6.9 billion, exceeding expectations of $6.8 billion, but net income fell 3% to $2.26 billion, slightly short of the $2.3 billion forecast.
“We will continue to focus on delivering an unparalleled experience with simple, everyday value and accessibility that our consumers can count on as they continue to be careful about their spending,” said CEO Chris Kempczynski.
In order to attract US customers who are not satisfied with the rising prices of burgers, fries and drinks, McDonald's extended its summer promotion for $5 meals. The advertising campaign is having a positive effect: comparable sales at approximately 13,500 McDonald's restaurants in the US recovered from a decline in the second quarter, rising by 0.3%.
In the international markets where McDonald's operates restaurants and franchises, comparable sales decreased by 2.1%, mainly due to France and the UK. In licensed international markets, sales decreased by 3.5%.
McDonald's notes that the war in the Middle East and falling sales in China have negatively affected its performance, although the company's business in Latin America continues to grow.
Recall
Last week, McDonald's shares showed a 9% drop after reports of an E. coli outbreak in the United States.
