McDonald’s reports 12% drop in profits as it redoubles value push

McDonald’s reports 12% drop in profits as it redoubles value push

International licensed markets were hit by negative results in China and the drag from the war in the Middle East.

McDonalds
Profits at McDonald’s for the quarter ending June 30 were US$2 billion while revenues were essentially flat at US$6.5 billion. (AP pic)
NEW YORK:
McDonald’s reported a drop in profits today behind broad-based sales declines as the fast food giant redoubles efforts to win over inflation-weary consumers.

All three of the chain’s operating regions experienced comparable sales decline, a significant weakening next to the year-ago results when global comparable sales jumped nearly 9%.

Profits for the quarter ending June 30 were US$2 billion, down 12%. Revenues were essentially flat at US$6.5 billion.

In the home market of the US, McDonald’s experienced a drop in guest counts, although results were bolstered somewhat by digital and delivery growth.

The company’s press release cited France as a driver of negative results in its international operated markets, while international developmental licensed markets were hit by negative results in China and the drag from the Middle Eastern war.

McDonald’s in June kicked off a US$5 meal promotion in the US that includes a sandwich, small fries, a small soft drink and a four-piece Chicken McNuggets package.

The summer offering is a pitch to inflation-weary consumers to “help your dollar go further,” said a June 20 company announcement for a programme that has reportedly been extended into August.

Shares of McDonald’s rose 0.7% in pre-market trading.

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