(MENAFN) McDonald's Corporation announced that it fell short of quarterly profit estimates for the first time in two years, a development attributed in part to demands for a global boycott against the fast food chain amid the conflict in the Gaza Strip, the company revealed on Tuesday.
Despite reporting nearly 2 percent growth in global comparable sales in the first quarter, marking 13 consecutive quarters of positive growth, McDonald's faced challenges in international markets, particularly in regions affected by the conflict in Gaza.
In a statement, the company noted, "Global comparable sales increased 1.9 percent, reflecting positive comparable sales in the U.S. and International Operated Markets segment. Comparable sales in the International Developmental Licensed Markets segment were slightly negative as the segment continued to be impacted by the war in the Middle East." Additionally, it added, "The continued impact of the war in the Middle East more than offset positive comparable sales in Japan, Latin America, and Europe."
The fast-food giant has faced calls for a boycott following actions by Alonyal Limited, which operates McDonald’s in Israel, including the distribution of thousands of free meals to Israeli forces in the wake of attacks by Tel Aviv against Gaza. These attacks have resulted in the loss of thousands of lives, predominantly women and children.
McDonald’s CEO, Chris Kempczinski, acknowledged on a conference call earlier this year that the conflict has had a detrimental effect on the company's brand and has led to reduced sales in Muslim-majority countries. This acknowledgment underscores the broader impact of geopolitical tensions on multinational corporations and highlights the complexities they face in navigating socio-political issues while maintaining their market position and reputation.
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