McDonald’s earnings miss estimates as diners pull back, Middle East boycotts hit sales
McDonald's reported mixed quarterly results Tuesday as its reorganization weighed on its profit and boycotts hurt its Middle Eastern sales.
The company also continues to see consumers worldwide pull back on their restaurant spending.
"Consumers continue to be even more discriminating with every dollar that they spend as they faced elevated prices in their day-to-day spending, which is putting pressure on the [quick-service restaurant] industry," CEO Chris Kempczinski said on the company's conference call.
He added that McDonald's has to be "laser focused" on affordability to attract diners.
Shares of McDonald's fell more than 2% in morning trading.
Here's what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:
McDonald's reported first-quarter net income of $1.93 billion, or $2.66 per share, up from $1.8 billion, or $2.45 per share, a year earlier. The company recorded a pretax charge of $35 million tied to its reorganization, which was announced more than a year ago.
Excluding restructuring charges, the fast-food giant earned $2.70 per share.
Net sales rose 5% to $6.17 billion. The company's global same-store sales increased 1.9% in the quarter, falling short of StreetAccount estimates of 2.1%.
McDonald's reported U.S. same-store sales growth of 2.5%, missing expectations of 2.6%. The chain said that the average check grew thanks to higher menu prices. But by raising prices, McDonald's has also scared away some of its low-income customers.
Kempczinski said the company is working on a national value deal in the U.S. While the strategy could attract more customers, franchisees may push back because those promotions can cut into their profits.
"Our U.S. leadership team is working