McDonald’s loses $7 billion due to the boycott over Gaza
McDonald’s lost about $7 billion of its value within hours after its CFO, Ian Borden, announced on Wednesday that the boycott in the Arab region and the Islamic world would continue to affect sales during the current year.
Since last October, the Arab and Islamic worlds have witnessed a boycott campaign against companies considered supportive of Israel in its war on the Gaza Strip, including McDonald’s.
During Wednesday’s trading, McDonald’s shares fell by more than 3%, heading towards recording the largest daily loss in 5 weeks. The company’s shares fell 3.37%, or $9.93, to $284.36 at the time of writing, resulting in the company losing $6.87 billion.
This came after Borden acknowledged that international sales would decline successively in the current quarter as a result of the continuing conflict in the Middle East and weak demand in China.
First-quarter comparable sales in McDonald’s International Developmental Markets franchised segment will be “slightly lower” than the previous three-month period, Borden said at the UBS Global Consumer and Retail Conference.
The company’s companions to the most widespread restaurant chain in the world, are facing troubles as boycott campaigns against them continue. Customers in the Arab and Islamic world were angry after McDonald’s in Israel announced last October that it would provide free meals to Israeli soldiers. In an attempt to alleviate this anger, some McDonald’s branches in the Arab region announced donations for Gaza Strip relief.
Last month, McDonald’s President and CEO Chris Kempczinski warned that “misinformation” in the Middle East and elsewhere was hurting sales.
Last February, the company did not achieve widespread Wall Street estimates for fourth-quarter sales in this sector, partly due to protests and boycott campaigns against many Western brands due to its pro-Israel stance in its aggression that it has been waging on the Gaza Strip for more than 5 months.
McDonald’s fails to achieve targeted sales for the first time in years.
McDonald’s ended a year full of challenges at a time when it lost a large portion of its sales in Middle Eastern markets due to boycott campaigns.
Earlier This week company announced, that it had not achieved its targeted sales for the first time in nearly 4 years during the past quarter, affected by weak sales growth in its businesses in the Middle East, China and India.
The fast-food giant is among several Western brands that have witnessed protests and boycott campaigns against it due to its pro-Israel stances in its war on Gaza.
Sales of the brand in international development markets licensed by McDonald’s increased 0.7% in the past quarter, which is much lower than expectations for 5.5% growth, according to data from the London Stock Exchange Group.
The company’s shares, listed on the US Nasdaq index, declined by more than 4% to $285.12.
As the fast-food giant faces these challenges, McDonald’s is closely monitoring the developments of the situation in the Middle East, recognizing the ongoing negative impact on sales and revenues system-wide as long as the conflict continues, according to Yahoo Finance.
