Gaza boycott continues to weigh on McDonald's sales / Photo: PASCAL GUYOT - AFP/File
-
India seeks threefold increase in coal stocks to prevent summer power shortages
-
Indian companies report mixed second-quarter results on November 4
-
Indus Towers expands solar-powered network to 50,000 telecom sites
-
KKR secures Indian regulator approval for Gentari Renewables investment
-
Equitas Small Finance Bank rebounds after naming interim chief executive
-
Bharti Airtel revenue expected to grow at double-digit pace in second quarter
-
Titan quarterly profit seen rising as jewellery business drives growth
-
Indian crude-sensitive shares gain after 13% oil-price decline
-
Kuwait finance minister holds economic cooperation talks at COMCEC
-
Stocks and dollar fall as Democratic election gains reshape markets
-
Kuwait marks key events and anniversaries from national history
-
Qatar Tourism joins Pacific Asia Travel Association at London travel market
-
Qatar media bodies discuss support for humanitarian initiatives
-
Pitches and Keynote Speakers Are Confirmed for Blue Magic Netherlands on November 17
Gaza boycott continues to weigh on McDonald's sales
McDonald's reported a modest increase in quarterly profits Tuesday despite a boycott stemming from the Middle East conflict expected to drag on sales for the foreseeable future.
While the boycott is not "getting worse," Chief Executive Chris Kempczinski does not have a timeframe for a return to normal conditions.
"We're not expecting to see any meaningful improvement in the impact... until the war is over," he told analysts on a conference call.
Sales of McDonald's were dented after its Israel franchise in October announced it had given thousands of free meals to the Israeli army.
That move was followed by relief pledges to Gaza from McDonald's Kuwait and McDonald's Qatar, both of which are managed separately from the Israeli business.
Most McDonald's restaurants in the Middle East are operated under a franchise agreement in which the corporate parent does not invest capital, McDonald's said in a securities filing.
Earlier this month, McDonald's agreed to acquire Alonyal, which has over 30 years built the McDonald’s brand to 225 restaurants in Israel, employing more than 5,000 people.
McDonald's has described the boycott's greatest impact as in the Middle East, while also pointing to effects in markets like Malaysia and Indonesia and in parts of France where the Muslim population is higher.
The big fast-food chain experienced a dip in comparable sales in "International Developmental Licensed Markets," which comprises emerging markets.
"The continued impact of the war in the Middle East more than offset positive comparable sales in Japan, Latin America and Europe," McDonald's said of the division.
Overall, profits in the first quarter rose seven percent to $1.9 billion on a five percent increase in revenues to $6.2 billion.
The chain scored higher comparable sales in the United States -- where results were boosted by "strategic" price increases -- and in the "International Operated Markets" division, where gains in Britain and Germany compensated for negative sales in France.
Chief Financial officer Ian Borden said sales in the United States and in many other large markets will probably be "below" the historical range in 2024 due to the cumulative effects of inflation on customers.
"Affordability is clearly an area where consumer expectations are heightened," Borden said. "Obviously (consumers) are getting hit across their full basket of goods and services by all the inflationary impacts."
Shares of McDonald's declined 0.1 percent in midday trading.
A.Zimmermann--CPN
