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McDonald’s posts rare profit miss as customers turn picky

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McDonald’s reported its first quarterly profit miss in two years as sales growth slowed globally.

Comparable sales rose just 1.9% overall versus estimates of 2.35%, with the U.S. seeing a sharp decline to 2.5% growth compared to 12.6% last year.

“Consumer is certainly being very discriminating in how they spend their dollar … I think it’s important to recognize that all income cohorts are seeking value,” McDonald’s CEO Chris Kempczinski said.

“We have seen that our relative superiority on affordability has declined in some markets,” Kempczinski added.

International licensee sales also fell short of estimates, dropping 0.2%.

“The impact of the war in the Middle-East will pressure all U.S. brands internationally and this remains an unknown which will create risk for firms generating operating income from this region,” Northcoast Research analyst Jim Sanderson stated.

The company cited consumers tightening spending and seeking more value amid high inflation.

McDonald’s had raised prices but said its affordability edge declined in some markets.

The conflict in the Middle East additionally weighed on international sales, particularly in that key region.

McDonald’s profit and revenue missed Wall Street forecasts due in part to rising costs from factors like higher egg prices.

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