MENA Region Boycott Impacts McDonald’s Sales, Reporting 4% Share Drop
McDonald’s admits to the impact of the boycott taking place in the Middle East and several Muslim-populated countries, saying that it encountered a drop in sales, the first of its kind in four years.
This drop is due to several months of ongoing boycott of the food chain, which was triggered early in October 2023 when McDonald’s Israel announced sending thousands of meals to the Israeli Forces.
What Are The People Saying?
Reuters reported the food giant saying that the war on Gaza had “meaningfully impacted” performance in some overseas markets in the fourth quarter.
Several people have also commented on the sales drop, notably CEO Chris Kempczinski, who said, “So long as this war is going on … we’re not expecting to see any significant improvement (in these markets).”
Brian Mulberry, client portfolio manager at Zacks Investment Management, which holds McDonald’s shares, also added: “The effects (of the war) on earnings durability would be our biggest concern … it looks like this is going to be an issue that persists past the next quarter or maybe even two.”
What Do The Numbers Say?
According to London Stock, the burger giant expected a 5.5% market growth in sales, but to its surprise, the expectations were met by only a 0.7% growth. This has sent McDonald’s shares down by 4%.
On a similar note, Starbucks will cut its annual sales forecast, partly due to a hit to sales and traffic at stores in the Middle East.
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