McDonald’s global sales fall more than expected on muted demand
McDonald’s on Tuesday posted a steeper-than-expected drop in quarterly global comparable sales, hurt by weaker traffic across its key markets even as it intensified promotions to woo back customers after several years of price hikes.
Global sales fell 1.5 percent in the third quarter, the biggest decline in four years, compared with analysts’ average estimate of a 0.72 percent fall, according to data compiled by LSEG.
The burger chain has been hit by slowing customer visits across the US, Europe and China as price-conscious shoppers looked for cheaper meal fixes and cooked more at home.
The sluggish demand has prompted fast-food chains including Wendy’s, Burger King and Taco Bell to lean into meal bundles and limited-time offers in a bid to revive traffic, especially among lower-income customers.
McDonald’s CEO Chris Kempczinski said the company was focused on affordability as customers continue to be mindful about spending.
Last week, McDonald’s temporarily paused serving Quarter Pounders in a fifth of its 14,000 US restaurants, following an E. coli outbreak that has infected 75 people and killed at least one person.
Slivered onions used in the hamburgers are likely to be the source of the infection, with the Colorado Department of Agriculture over the weekend ruling out beef patties as the
possible cause.
The company’s conference call on earnings is expected to focus on any fallout from the outbreak.
US comparable sales grew 0.3 percent in the quarter ended Sept. 30, reversing the previous quarter’s drop, partly aided by a $5 meal deal which has been extended into December at most McDonald’s locations.
Sales in international markets fell 2.1 percent driven by weakness in France and Britain, compared with estimates of a 1.21 percent drop.
Weaker consumer spending in China and impacts of the Middle East conflict have dented McDonald’s business segment where restaurants are operated by local partners, with sales dipping 3.5 percent compared with a 10.5 percent rise a year earlier.
The Chicago-based company earned $3.23 per share on an adjusted basis in the quarter, compared with last year’s $3.19.
