McDonald’s is seeing a slower start to 2024, especially in China and France as “significant” macro-economic headwinds in the company’s International Operated Markets, or IOM, will impact the company’s profitability in the first half of 2024.
“First-quarter comp sales [were] slightly lower than what we saw in quarter four. I mean, obviously, we continue to deal with the impacts of the war in the Middle East. But we’re also seeing what I would call a sluggish start in China this year.
I think you’ve heard lots of different companies talk about that the, what I’ll call the macro and consumer challenges in China. I think our business is doing okay, but I think the environment continues to be challenging. So that’s probably a bit more texture on kind of ’24 and the start to the year, “ McDonald’s CFO Ian Borden said at the UBS Global Consumer and Retail Conference on Wednesday.
Borden’s comments weighed on McDonald’s shares with the stock more than 3% lower and flirting with a breach of the 100-day moving average.
The fast-food chain also predicts same store sales of 3-4% for 2024 with the back half of 2024 slightly stronger than the first half. McDonald’s sees comparable sales lagging in the first half due to the strength of the first two quarters in 2023 that make comparisons challenging, in addition to weather conditions in which sales during a very mild January 2023 is being compared to a more typical winter in January 2024 which had a detrimental impact to the company.
Despite international headwinds, the company continues to be viewed favorably by analysts. Seeking Alpha authors and Wall Street analysts give the company a Buy rating.
McDonald’s (NYSE:MCD) shares are down 3%.