McDonald’s Reports Mixed Quarterly Results Amid Turmoil in the Middle East

McDonald’s reported mixed quarterly results on Monday as sales in the Middle East were impacted by the ongoing turmoil in the region. The company’s shares fell slightly in premarket trading.

Earnings and Revenue

Here’s how McDonald’s performed compared to Wall Street’s expectations:

• Earnings per share: $2.95 adjusted vs. $2.82 expected
• Revenue: $6.41 billion vs. $6.45 billion expected

The fast-food giant reported a net income of $2.04 billion, or $2.80 per share, for the fourth quarter, up from $1.9 billion, or $2.59 per share, in the previous year. Excluding certain items, McDonald’s earned $2.95 per share. Net sales increased by 8% to $6.41 billion.

Global Same-Store Sales

McDonald’s global same-store sales grew by 3.4% in the quarter, falling short of estimates. The Middle Eastern market struggled, with same-store sales increasing by just 0.7%. The company attributed this to the Israel-Hamas war, which led to boycotts and temporary closures of some locations. However, other markets in the segment, such as China and Japan, reported positive same-store sales growth.

Domestic and International Markets

Domestic same-store sales in the United States rose by 4.3%, in line with expectations. This growth was driven by menu price hikes, effective marketing, and digital sales growth. In the international operated markets segment, which includes Canada, Australia, and Germany, same-store sales grew by 4.4%, but shrank in France.

2024 Outlook

For 2024, McDonald’s reiterated its forecast that new restaurants will contribute to a nearly 2% increase in systemwide sales growth, excluding currency changes. The company plans to open over 2,100 new locations this year as part of its expansion strategy. McDonald’s also announced that it will spend between $2.5 billion and $2.7 billion on capital expenditures, with a focus on opening new restaurants in the U.S. and its international operated markets.