McDonald’s Middle East sales grow after year-long decline

McDonald’s reported an unexpected rise in global sales, with its business in the Middle east picking up after a year of decline, the Financial Times reported on February 10th.

The US fast-food giant said comparable sales increased by 0.4% in Q4 year-on-year. This surpassed analysts’ expectations of a 0.4% decline, according to a Visible Alpha poll. The company attributed the improvement to gains in key international markets, with the Middle East and Japan leading the recovery.

McDonald’s sales have been under pressure since October 2023, when Israel’s military bombardment of Gaza inspired a boycott of brands deemed complicit with Israeli atrocities in several Middle Eastern and Muslim-majority nations. Among the brands the pro-Palestinian Boycott, Divestment, Sanctions (BDS) movement wanted to be boycotted were McDonald’s.

Last October, McDonald’s Chief Financial Officer Ian Borden warned that sales would remain under strain “as long as the war in the Middle East continues.” The conflict persisted for 15 months before Israel and Hamas agreed to a ceasefire on January 19th.

The corporation had also announced on April 4th 2024, that they need to buy back their Israeli franchises.

Despite global sales growth, McDonald’s reported flat revenue of $6.4 billion for Q4, slightly below analysts’ forecasts. Net profit declined by 1% to $2 billion, missing estimates of $2.1 billion, although the company’s shares rose by 2% in pre-market trading on February 10th.

The Financial Times, The New Arab and agencies, The BBC