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McDonald's expands its offer of cheap meals – guests return to the restaurant
McDonald's – greater selectivity of price increases
Persistent inflation has forced lower-income consumers to choose the cheaper option of eating at home. This has caused fast food chains such as McDonald's, Burger King, Taco, Wendy's and Bell to introduce cheap meals to their menus in order to generate customer traffic.
McDonald's shares, already down 15% this year, suddenly surged 4% after company executives announced that $5 meals introduced in late June. they sold beyond expectations.
The chain, which maintained its 2024 forecast of a medium to high operating margin of 40%, said it would maintain profitability by remaining more selective in the event of price increases.
The company maintained its planned capital expenditure budget at up to $2.7 billion, of which more than half is allocated to new restaurants in the US and international markets.
Unfulfilled financial expectations of McDonald's
McDonald's global comparable sales fell 1% in the second quarter, compared with expectations for a 0.5% increase, with the U.S. falling 0.7% in the quarter ended June 30, compared with growth of 10.3%. a year before. Sales in international markets, which accounted for almost half of the company's revenue in 2023, decreased by 1.1%.
A slower-than-expected recovery in China and the conflict in the Middle East are negatively affecting the results of McDonald's business segment in which restaurants are run by local franchisees. Sales there fell by 1.3% compared to an increase of 14% a year earlier.
The fast food giant also suffered from a consumer boycott related to the war in Gaza, which affected sales in Middle Eastern markets.
McDonald's earned $2.97 in the second quarter. per share after adjustment, which did not meet expectations of $3.07.
