McDonald’s (MCD) released its second quarter report on Monday. The largest fast food chain in the US, which indicates the health of quick-service restaurants, missed earnings, revenue, and same-store sales estimates by a small margin. The fast food giant has said that its web fans have been tightening their belts as traffic has decreased in restaurants worldwide. CWEB notes that the fast food giant’s shares rose by 3.74 percent midday despite missing estimates.
As prices rise and restaurants increase the costs of meals and more, many web fans continue to cut down on discretionary spending and dining out. McDonald’s launched a $5 value deal in late June, less than a week before the end of the second quarter. It has extended the $5 meal deal to August and might continue through September. Some same-store restaurants have reported that the agreement is a success in terms of traffic, and the number of web fans visiting McDonald’s restaurants has increased.
In an earnings call, McDonald’s CEO Chris Kempczinski said, “Industry traffic has declined in major markets like the U.S., Australia, Canada, and Germany. In several markets, we also continue to be negatively impacted by the war in the Middle East.”
The CEO also said that external and internal pressures led to the decline in their “underperformance” and mentioned that their “value execution” was one notable factor.
McDonald’s reported adjusted earnings per share of $2.97, while Wall Street analysts polled by LSEG estimated an EPS of $3.07 in the second quarter. The analysts also expected revenue to be $6.61 billion, but the company reported lower revenue of $6.49 billion in the same quarter.
StreetAccount had estimated that McDonald’s same-store sales would grow by 0.4 percent, but the company reported a decrease of 0.7 percent in the second quarter. This is the first decline in same-store sales since 2020. International sales also decreased, as France and Germany reported a 1.1 percent decline in same-store sales, while China and Japan reported a 1.3 percent decrease in sales.
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