US sales slide, but McDonald's stays resilient abroad amid rising anti-American mood
NEW YORK, May 2 — Fast food giant McDonald's reported a drop in first-quarter profits yesterday as US traffic from low- and medium-income customers diminished amid economic anxiety in the wake of President Donald Trump's trade wars.
The chain's home market of the United States saw a 3.6-per cent drop in comparable sales, more than the 1 per cent fall globally.
'The big thing is people are just visiting less and that speaks to the pressures on consumers, consumer sentiment,' Chief Financial Officer Ian Borden said in a conference call with analysts.
'The things that we've been talking about for a while now — inflationary pressures, interest rates that are weighing obviously, particularly on lower consumers, and that's spilling over into middle-income consumers right now,' he said.
Executives said there had been no drop in spending from higher-income consumers.
The company said it plans more promotions centred on its 'McValue' platform, which includes limited-time US$5 meal (RM21.50) combinations featuring a sandwich, Chicken McNuggets, fries and a drink.
Profits came in at US$1.9 billion, down 3 per cent, while revenues also fell 3 per cent to US$6 billion.
The chain described a 'mixed' performance across international businesses, flagging weakness in the United Kingdom, but a strong performance in the Middle East and Japan.
Company polling has shown the chain has not suffered due to a rise in anti-US sentiment in international markets, CEO Christopher Kempczinski said in response to an analyst question.
'We've seen an uptick in anti-American sentiment, call it, eight to 10 points increase in anti-American sentiment,' Kempczinski said of company surveys that have shown the biggest negative impact in Northern Europe and Canada.
'That's had no impact on our business and consumer sentiment toward the McDonald's brands remains strong,' he said.
Shares of McDonald's fell 1.3 per cent in afternoon trading. — AFP
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