McDonald’s Oct-Dec results: Sales rise 3.4%, hit by West Asia boycotts

A banner year came to a bumpy end for McDonald’s, which lost sales in many markets due to the war in Gaza.

Global same-store sales or sales at restaurants open at least a year rose 3.4 per cent in the October-December period, well below the 4.7 per cent increase Wall Street was expecting, according to analysts polled by FactSet.

Customers in the West Asia 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.

Last month, McDonald’s President and CEO Chris Kempczinski warned that misinformation in the West Asia and elsewhere was hurting sales. In addition to customer boycotts, McDonald’s has had to temporarily limit store hours or close some locations due to protests.

We abhor violence of any kind and firmly stand against hate speech, and we will always proudly open our doors to anyone, Kempczinski said in a LinkedIn post.

It was an unexpected end to an otherwise strong year for the burger giant, which said global sale-store sales rose 9 per cent in 2023. Viral marketing hits, like last spring’s Grimace shakes, and upgraded menu items helped to boost full-year revenue by 10 per cent to nearly USD 25 billion.

McDonald’s wasn’t the only US company seeing backlash from the war in recent months. Starbucks said last week that it faced boycotts in the West Asia and elsewhere because of its perceived support for Israel.

McDonald’s revenue rose 8 per cent to USD 6.4 billion in the fourth quarter, meeting analyst expectations. Net income was up 7 per cent to USD 2 billion.

Excluding one-time items, such as USD 66 million restructuring charge, the company earned USD 2.95 per share. That beat analysts’ forecast of a USD 2.83 per-share profit.

McDonald’s Corp. shares were flat in pre-market trading Monday.

First Published: Feb 05 2024 | 7:32 PM IST