McDonald's profit misses expectations

American quick-service restaurant chain McDonald's, which has been the target of boycotts due to Israel's attacks on Gaza, saw same-store sales decline in the market group that includes its restaurants in the Middle East, while the company's profit fell short of 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 the previous year, reaching $6.17 billion. The company had revenue of approximately $5.9 billion in the same quarter in 2023. The restaurant chain's store sales also increased by 1.9 percent, but fell short of market expectations of a 2.1 percent increase. Sales in the "International Advanced Licensed (IDL) Markets" group, which includes restaurants where McDonald's has licensed the franchising rights to strategic partners, showed negative performance due to the ongoing impact of the war in the Middle East. The company's sales in this group decreased by 0.2 percent, marking the first time since the Covid-19 outbreak that McDonald's sales in a market group have decreased. McDonald's net profit increased by 7 percent in the first quarter to $1.9 billion. The company made a profit of $1.8 billion in the same period last year. The company's earnings per share, which was $2.45 in the first quarter of last year, remained below market expectations, although it rose to $2.66 in the first quarter of 2024. "Consumer pressures continue" McDonald's CEO Chris Kempczinski reported at the investor conference held after the company's balance sheet was announced 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 face high prices in their daily expenses, Kempczinski emphasized that this also creates pressure on the quick service restaurant sector. The company’s Chief Financial Officer (CFO) Ian Borden also noted that positive sales in Japan, Europe and Latin America in the IDL group were offset by the ongoing war in the Middle East. McDonald’s IDL market group also includes restaurants in the Middle East that have been affected by boycotts. “Free meals for Israeli soldiers” sparked backlash International companies that made statements supporting Israel’s attacks on the Gaza Strip and sent aid began to face boycotts and protests worldwide. McDonald’s Israel’s announcement that it would distribute free meals to Israeli soldiers also sparked a major backlash. The US quick-service restaurant chain announced in early April that it would purchase 225 franchise restaurants in Israel.