The fast food chain’s sluggish development in its foreign business segment resulted in its first quarterly sales miss in over four years.
Prior to this, its leader had admitted the conflict’s effects and blamed “misinformation”.
Following the news, McDonald’s stock experienced a roughly 4% decline.
A number of Western companies, such as Starbucks and Coca-Cola, have faced boycotts and demonstrations by anti-Israel activists, including McDonald’s.
According to the company, in the fourth quarter of 2023, the Israel-Gaza conflict “meaningfully impacted” performance in certain international markets.
Sales growth in the branch that encompasses sales in the Middle East, China, and India was only 0.7% in the fourth quarter of 2023, far less than what the market had anticipated.
CEO Chris Kempczinski stated on Monday that the company’s operations in France, Malaysia, and Indonesia had been impacted, with the Middle East experiencing the worst effects.
“So long as this war is going on… we’re not expecting to see any significant improvement [in these markets],” said the manager of McDonald’s.
McDonald’s has over 40,000 locations worldwide, most of which are owned and operated by thousands of independent businesses under a franchise system. In the Middle East, there are about 5% of its stores.
The fast food chain faced backlash after its Israel-based franchise revealed that it had provided hundreds of complimentary meals to Israeli military personnel. Those who were incensed by Israel’s military action in Gaza called for a boycott of the company.
It led franchise owners in Muslim-majority nations like Pakistan, Malaysia, and Kuwait to release statements severing their ties to the company.
Mr. Kempczinski attributed the criticism to “misinformation” and referred to it as “disheartening and ill-founded.”
