McDonald’s earnings miss estimates as boycotts weigh on Middle Eastern sales

McDonald’s reported mixed quarterly results Tuesday as its reorganization weighed on its profits and boycotts hurt its Middle Eastern sales.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
Earnings per share: $2.70 adjusted vs. $2.72 expected
Revenue: $6.17 billion vs. $6.16 billion expected
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 pre-tax 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.
Demand in the company’s international developmental licensed markets was even weaker. McDonald’s said the segment’s same-store sales fell 0.2%, marking the first time since the pandemic that one of the chain’s divisions reported a same-store sales decline.