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McDonald’s sales took a hit in the latest quarter due to the ongoing turmoil in the Middle East.
It primarily impacted the international development licensed markets and segment whose same store sales increased a slim 0.7%. This small uptick reflected “the impact of the war in the Middle East,” the company said, adding that it’s “monitoring the evolving situation” but anticipates that there will be a continued negative impact on systemwide sales and revenue as long as the war continues.
Shares fell in early trading Monday.
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In total, global same-store sales increased 3.4% in the quarter, which was the slowest sales growth in about three years, Reuters reported.
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CEO Chris Kempczinski had already warned last month that the company’s business in the Middle East was being affected due to the war between Israel and Hamas.
In a LinkedIn post, Kempczinski wrote that “several markets in the Middle East and some outside the region are experiencing a meaningful business impact due to the war and associated misinformation that is affecting brands like McDonald’s.”
Shares of the fast-food giant are down over 3% this year, compared to a nearly 4% rise for the S&P 500.
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The company is among other top chains such as Starbucks that have become the target of boycotts over their perceived pro-Israel stance and alleged financial ties to Israel.
Starbucks CEO Laxman Narasimhan said many of its stores have experienced incidents of vandalism as protests fueled by misrepresentation escalated.
FOX Business’ Michael Dorgan contributed to this report.