McDonald's posts weaker-than-expected Q1 results as boycotts weigh on sales

McDonald’s said higher U.S. sales in the first quarter helped it overcome weakness in the Middle East and other markets where consumers have been boycotting the brand.

The Chicago burger giant said its same-store sales – or sales at stores open at least a year -- rose 1.9% worldwide in the January-March period. That was below Wall Street’s forecast of a 2.1% increase, according to analysts polled by FactSet.

In the U.S., same-store sales rose 2.5% as the company raised prices and saw higher demand for delivery. But sales fell 0.2% in McDonald’s international franchised markets. It was the first time since 2020 that same-store sales have fallen in that segment.

Customers across the Middle East and in Muslim-majority markets like Indonesia and Malaysia have been boycotting McDonald’s for months over its perceived support for Israel. The boycotts began in October, after McDonald’s local Israeli franchisee announced it was providing free meals for Israeli troops involved in the war in Gaza.

McDonald’s has tried to limit the fallout. In early April, the company said it was buying Alyonal Limited, its Israeli franchisee, and taking over the country's 225 restaurants. Financial terms of the deal weren't released.

McDonald's said its revenue rose 5% to $6.17 billion in the January-March period. That was in line with Wall Street's estimates.

Net income was up 7% to $1.93 billion. Earnings, adjusted for restructuring charges, were $2.70 per share. That was short of analysts' forecast of $2.72.

McDonald's shares were down 1.5% in premarket trading Tuesday.