Fast food titan McDonald’s has taken a hit with a surprise double-digit dip in sales worldwide for the first time in nearly four years.
The chain’s net income fell 12% to $2billion, or $2.80 per share in the second quarter amid inflation.
McDonald’s expects sales to continue to be down for the next few quarters, and is working to make adjustments to reverse the trend.
‘The biggest hit for McDonald’s is the low-income consumer has really cut back on visits and that is more than offsetting the typical trade down McD normally sees in tougher economic times,’ stated Edward Jones analyst Brian Yarbrough.
McDonald’s president, chairman and CEO Chris Kempczinski told investors on Monday ‘we are working to fix that with pace’.
‘Consumers still recognize us as the value leader versus our key competitors, it’s clear that our value leadership gap has recently shrunk,’ he said.
It comes as McDonald’s customers have recently complained of high priced items.
Some analysts believe meal deals are the key to McDonald’s bouncing back.
‘Even though things are soft now, they should be getting better in the back half of the year… with better value on the menu,’ said Brian Mulberry, a client portfolio manager at Zacks Investment Management.
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