McDonald’s sales hit over Middle East conflict

McDonald’s sales took a hit in the latest quarter due to ongoing turmoil in the Middle East.

This primarily affected the international development licensing market and the segment where same-store sales increased by only 0.7%. The company said the small increase reflected “the impact of the Middle East war,” adding that it was “monitoring the evolving situation,” but that it expected system-wide sales and profits to be negatively affected as long as the war continues. It added that it expected the impact to continue. .

Shares fell in early trading Monday.

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Global same-store sales totaled 3.4% for the quarter, but it was the slowest sales growth in nearly three years, Reuters reported.

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CEO Chris Kempczinski had already warned last month that its operations in the Middle East were being affected by the war between Israel and Hamas.

“Several markets in the Middle East and some markets outside the region have experienced significant business disruption due to the wars and associated misinformation affecting brands such as McDonald’s,” Kempczinski said in a LinkedIn post. It’s having an impact,” he wrote.

The fast-food giant’s stock is down more than 3% this year, while the S&P 500 is up nearly 4%.

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McDonald’s, San Leandro, California, April 28, 2022. (Justin Sullivan/Getty Images/Getty Images)

The company is the target of a boycott among top chains such as Starbucks due to its perceived pro-Israel stance and alleged financial ties to Israel.

Starbucks CEO Laxman Narasimhan He said many stores had been vandalized as protests fueled by mislabeling intensified.

FOX Business’ Michael Dorgan contributed to this report.