McDonald’s reports weaker-than-expected first-quarter results as boycotts weigh on sales

McDonald’s said rising U.S. sales in the first quarter helped overcome weakness in the Middle East and other markets where consumers have boycotted the brand.

The Chicago-based burger giant said its same-store sales — or sales at stores open at least a year — rose 1.9% worldwide in the January-March period. That was below Wall Street’s forecast for a 2.1% increase, according to analysts surveyed by FactSet.

In the US, same-store sales rose 2.5% as the company raised prices and saw greater demand for delivery. But sales fell 0.2% in McDonald’s international franchised markets. It was the first time since 2020 that same-store sales fell in this segment.

Customers across the Middle East and in Muslim-majority markets such as Indonesia and Malaysia have been boycotting McDonald’s for months over its apparent support for Israel. The boycotts began in October after the local Israeli McDonald’s franchisee announced that it was providing free meals to Israeli troops involved in the war in Gaza.

McDonald’s tried to limit the fallout. In early April, the company announced that it was purchasing Alyonal Limited, its Israeli franchisee, and taking control of the country’s 225 restaurants. Financial terms of the deal were not disclosed.

McDonald’s said its revenue rose 5% to $6.17 billion in the January-March period. This was in line with Wall Street estimates.

Net profit increased 7% to US$1.93 billion. Earnings, adjusted for restructuring charges, were $2.70 per share. The value was below analysts’ forecast of US$2.72.

McDonald’s shares fell 1.5% in premarket trading Tuesday.