McDonald’s releases results marred by conflict in the Middle East and China’s slowdown

2024-10-29 14:53:00

From Le Figaro with AFP

Posted 2 hours ago,
updated at 3.53pm

” data-script=” >

At the brand’s restaurants abroad, sales fell in many markets, particularly in France and the United Kingdom.

Fast food chain McDonald’s reported better-than-expected third-quarter results on Tuesday, but they were affected by conflict in the Middle East and poor performance in China. Quarterly turnover increased by 3% to 6.87 billion euros but decreased by 1.5% on a like-for-like basis, with a contrasting situation depending on the markets. Excluding extraordinary items, business increased 0.3% in the U.S. but fell 2.1% at group-owned restaurants and 3.5% at franchised restaurants.

The group does not mention in its press release the recent Escherichia coli contamination in the United States, which occurred during the fourth quarter of the financial year. In October, about 75 people fell ill after eating at one of its locations. At least 22 of them were hospitalized and one died. McDonald’s has suspended the marketing of the Quarter Pounder, a hamburger called Royal Cheese in France, in around 900 restaurants in twelve American states for several days. An investigation by health authorities revealed a possible link to onions, used only for this burger.

Between July and September, net income reached $2.25 billion (-3%), slightly below the consensus of FactSet analysts (2.30 billion). But, reported per share and excluding exceptional items – a benchmark for markets – it settled at $3.23 ($3.19 a year earlier) when the consensus had expected $3.21. Profit was impacted by pre-tax charges of $52 million related to the acquisition of the franchise group in Israel and the sale of its operations in South Korea, as well as pre-tax restructuring charges of $46 million related to its business plan «Accelerate the organization». The group points out that lower administrative and operational costs and higher franchisee margins have boosted its quarterly operating profit.

Across markets, on a comparable basis, McDonald’s reported average ticket growth in the United States, partially offset by increased attendance “slightly lower”. In restaurants going abroad, sales fell in many markets, particularly in France and the United Kingdom. And, for affiliates, conflict in the Middle East and declines in China have offset rising sales in Latin America. In electronic trading before the New York Stock Exchange opened, McDonald’s shares were down 2.29%.