McDonald’s suffered a second straight drop in sales in the third quarter due to weak consumer demand in international markets such as France, the United Kingdom, the Middle East and China.
The fast-food chain said global comparable sales slipped 1.5 percent year-on-year, more than the 0.6 percent decline in the Visible Alpha survey of analysts’ estimates, as noted by the Financial Times.
The drop was McDonald’s first consecutive drop in sales since the pandemic, following a 1% drop in the second quarter, as the chain tries to win back business from customers strained by years of food inflation, particularly households with lower income.
Third-quarter revenue rose 3% to $6.9 billion, beating the consensus estimate of $6.8 billion. However, net income fell 3% to $2.26 billion, slightly below estimates of $2.3 billion.
“We will remain focused on providing an unparalleled experience with simple, everyday value and an affordable price that our consumers can rely on as they continue to watch their spending,” said CEO Chris Kempzynski.
In an effort to appeal to US customers who have reacted to the higher costs of burgers, fries and soft drinks, McDonald’s has extended its $5 meal deal introduced over the summer. There are signs the promotional activity has paid off: Comparable sales at McDonald’s roughly 13,500 U.S. restaurants rebounded from a second-quarter decline, rising 0.3 percent.
Despite the uptick in U.S. sales, hopes for a revival were overshadowed by an E. coli outbreak linked to onions used in Quarter Pounder hamburgers in parts of the central U.S. The outbreak was detected this month, hitting the chain’s stock, but after the end of the third quarter.
McDonald’s is resuming sales of Quarter Pounders in the region this week after health authorities and the company traced the contamination to a single vegetable processor in Colorado. McDonald’s stopped buying onions from the supplier.
Worldwide comparable sales include restaurants open for at least 13 months in both the US and foreign markets. In international markets where McDonald’s operates and has franchised restaurants, comparable sales fell 2.1 percent, “driven by France and the United Kingdom,” the company said.
Comparable sales in licensed international markets fell 3.5%. McDonald’s cited the effects of the war in the Middle East and weaker sales in China, even as its business in Latin America grew.
McDonald’s in August began offering collectible cup sets in more than 30 countries, which Bernstein Research said could lead to an increase in comparable sales. The company had 42,406 restaurants worldwide in June, of which 95% were franchised.
Source: ot.gr
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