McDonald's posts surprise drop in quarterly global sales as spending slows
McDonald's reported a surprise drop in quarterly global comparable sales on Monday, as the burger giant struggled to hold back budget-strapped customers from opting for cheaper meals at home.
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Shares of the company, which are down 15% this year, fell 1.5% in premarket trading.
Global sales fell 1% in the second quarter, its first decline in 13 quarters, compared with analysts' average estimate of a 0.53% rise, according to LSEG data.
Persistent inflation and rising prices of burger and pizza have forced lower-income group to shift to affordable food options at home, leading to muted demand in the fast food industry, including for McDonald's and Domino's Pizza.
This has prompted restaurants to launch several value bundles and limited time offers priced between $3 and $5 as they look to win back value-focused consumers.
Value meal wars have ramped up as rivals Burger King, Wendy's and Starbucks rolled out meal deals in the recent months.
McDonald's was set to extend its $5 meal offer into August at most U.S. locations after its launch on June 25.
Its CEO Chris Kempczinski said consumers were more discriminating with their spend.
U.S. comparable sales fell 0.7% in the quarter ended June 30, compared with a 10.3% jump a year ago. Sales in international markets dropped 1.1%, driven by weakness in France and compared with estimates of a
