By James Myers, OAN Staff
Monday, July 29, 2024 1:30 p.m.
Fast-food giant McDonald’s reported its first sales decline since the coronavirus pandemic on Monday, as the chain struggles to attract customers due to “rising menu prices,” as some customers express frustration.
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McDonald’s recently launched a $5 value meal in June to attract more customers. The company also said its U.S. same-store sales fell 0.7% in the second quarter as revenue was flat.
For 2023, U.S.-based same-store sales are expected to grow 10.3%, while sales in international markets are expected to decline 1.1%, versus expectations of 1.69% growth.
However, McDonald’s reported sales of $6.5 billion, up 2% from a year ago but below the $6.63 billion that analysts had expected.
Customers around the world are cutting back on fast-food meals as prices continue to rise, according to McDonald’s CEO Chris Kempczinski, who told investors on an earnings call on Monday that consumers are “becoming more selective about how they spend.”
Additionally, Coca-Cola CEO James Quincey said there was “some softness in the dining out channel” in North America, indicating that fewer people are eating out.
“The biggest hit to McDonald’s has been the sharp decline in visits from lower-income consumers, which more than offsets the typical price cuts that McDonald’s typically experiences in tough economic times,” said Brian Yarbrough, an analyst at Edward Jones.
Additionally, companies such as McDonald’s and Starbucks have also been hit by boycotts related to the war between Israel and Hamas, affecting their sales in Middle Eastern markets.
The Chicago-based fast-food chain reported second-quarter adjusted earnings of $2.97 per share, missing expectations of $3.07.
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