Michelle ThompsonMcDonald’s said that fighting in the Middle East has made it difficult for their business to do well.
The burger company made more money in the fourth quarter, but they said that sales in some other countries were not as good because of problems there. They are keeping an eye on what’s happening.
The Middle East is not a big part of their business. McDonald’s lets other companies use its name in different areas. They also helped these companies financially by reducing the amount they had to pay or by waiting to collect money.
McDonald’s said it didn’t give much money to franchise owners affected by the war in the Middle East. However, sales in the licensed markets business, where most Middle East companies are included, only increased by 0. 7% in the last quarter due to tensions. That was much worse than the over 4% growth in the United States and other global businesses.
One year ago, the company’s licensed markets business was doing really well, with sales growing by more than 16%.
Overall, the sales at McDonald’s restaurants that have been open for at least a year went up by 3. 4% in the last three months of the year. This was lower than what analysts were expecting. The protests against the company in the Middle East had a negative impact on sales. This also made its income lower, even though it went up to $6. 41 billion, it was a bit less than expected.
McDonald’s (MCD) stock went down a little before the market opened.
Last month, McDonald’s and Starbucks both said that their business in the Middle East is being hurt by the war between Israel and Hamas. They want to clear up any misunderstandings and stop people from boycotting their restaurants.
After the Hamas attack on Israel on October 7, McDonald’s Israel gave away many free meals, as shown on social media. Many McDonald’s owners in the area quickly separated themselves from the actions of the operator in Israel. Franchise groups in Kuwait, Pakistan, and other countries said they don’t own the Israeli franchise.
Most McDonald’s restaurants are owned by local business owners called franchisees. These operators are like separate businesses. They decide how much to pay employees and charge for their products, and they can also choose to make public statements or give money whenever they want. This way of doing things has helped McDonald’s become popular all over the world. They have over 40,000 restaurants around the world, with almost 27,000 of them outside of the United States, as of 2022. In the USA, McDonald’s sold more food and drinks and made more money. This was because they raised their prices, got more orders delivered to people’s homes, and advertised their products well. One of their milkshakes became really popular on the internet.
US sales were close to what was expected, but sales in the fourth quarter were not as good as the 8. 1% increase it had reported in October.
In 2023, McDonald’s made 10% more money than the year before, with a total of $25. 49 billion in revenue compared to $23. 18 billion in 2022.
CEO Chris Kempczinski said that the company believes in the strength of our business even though there will be difficult challenges in 2024.
