McDonald’s (MCD) second-quarter financial results have missed Wall Street’s targets on both the top and bottom lines as consumers continue to avoid the quick-service restaurant chain.
Chicago-based McDonald’s announced earnings per share (EPS) of $2.97 U.S., which fell short of forecasts that called for $3.07 U.S.
Revenue in the quarter totaled $6.49 billion U.S., which missed consensus expectations of $6.61 billion U.S. Sales were flat compared to a year earlier.
McDonald’s reported that its same-store sales declined across every division during the April through June quarter as consumers visit its restaurants less frequently.
In all, same-store sales declined 1%, which was much worse than growth of 0.4% predicted by analysts who cover the company and its progress.
The second quarter marked the first time companywide same-store sales have fallen since the fourth quarter of 2020, which was during the depths of the Covid-19 pandemic when many McDonald’s restaurants were forced to close or operate at reduced capacity.
In the U.S., McDonald’s biggest market, same-store sales decreased 0.7% during Q2. A year ago, same-store sales in America rose 10%.
The disappointing Q2 results come as consumers cutback their restaurant spending, particularly at quick-service chains, following aggressive price hikes over the last 18 months.
Surveys have found that consumers no longer see quick-service restaurant chains as representing good value after their prices have risen sharply.
McDonald’s executives have acknowledged that higher prices have driven away customers. In June of this year, the company launched a $5 discount meal to try and win back consumers.
In mid-July, McDonald’s announced that it plans to extend the $5 value meal past the planned four-week trial period as it pivots to focus on price-conscious consumers.
McDonald’s international operations outside the U.S. are also struggling, with same-store sales falling 1.1% in Q2 of this year.
The company is also dealing with boycotts of its brand and anti-American sentiment throughout the Middle East and in China.
The stock of McDonald’s has declined 15% so far in 2024 to trade at $252 U.S. per share.
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