McDonald’s misses revenue target as it cites impact from Middle East war

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McDonald’s Corp.’s stock fell 1.3% in premarket trading on Monday after the fast-food giant missed Wall Street analysts’ estimates for revenue and same-store sales, while citing an impact from war in the Middle East.

The global fast-food giant said it expects “macro challenges” to persist in 2024.

said its fourth-quarter net income rose by 7% to $2.04 billion, or $2.80 a share, from $1.9 billion, or $2.59 a share, in the year-ago quarter.

McDonald’s said the latest quarter’s results included 15 cents a share in one-time charges.

Breaking those charges out, McDonald’s would have earned $1.95 a share. Analysts expected McDonalds to earn $1.83 a share, according to FactSet data.

Revenue rose 8% to $6.41 billion, short of the FactSet consensus estimate of $6.45 billion.

Fourth-quarter global comparable-store sales increased by 3.4%, including a 4.3% rise in the U.S.. Analysts expected same-store sales growth of 4.7%.

McDonald’s said its comparable sales fell in the Middle East as a reflection of war in the region since Oct. 7.

All other same-stores sales rose in international developmental licensed markets.

Total international developmental licensed markets same-store sales rose by 0.7%, well below the result in the previous quarter, which saw a 10.5% increase.

Looking back at the balance of 2023, McDonald’s said its net income rose by 37% to $8.47 billion.

Revenue jumped by 10% in 2023 to $25.49 billion.

Free cash flow for 2023 increased to $7.25 billion from $5.49 billion.

Before Monday’s moves, McDonald’s stock was up by 10.9% in the past year.

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