McDonald’s Corp (MCD) shares are trading slightly lower Thursday afternoon after the company’s CEO released a letter regarding headwinds related to the war in the Middle East.
In a new letter posted on LinkedIn, McDonald’s President and CEO Chris Kempczinski reflected on 2023 and warned of potential headwinds in markets in and around the Middle East. “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,” Kempczinski said.
The McDonald’s CEO called the developments “disheartening and ill-founded” and noted that McDonald’s is represented by local owner operators who employ thousands of their fellow citizens regardless of location. “That local community connection is the genius of the McDonald’s System,” Kempczinski said.
This news has had a negative impact on McDonald’s shares, as well as other fast-food stocks such as Wendy’s Co (WEN), Restaurant Brands International Inc (QSR), and Yum! Brands Inc (YUM).
McDonald’s is expected to report quarterly earnings at the end of the month, where investors are likely to get further updates on the headwinds in the Middle East. Analysts currently anticipate earnings of $2.82 per share on revenue of $6.44 billion.
Despite the challenges, McDonald’s remains a strong and globally recognized brand. The company’s commitment to local communities and its ability to adapt to changing market conditions will be crucial in navigating the current geopolitical landscape. Investors will be closely watching the upcoming earnings report for insights into how McDonald’s is managing these headwinds and its overall performance in the market.
As of the time of publication, McDonald’s shares were down 0.39% at $293.24. It will be interesting to see how the stock performs in the coming weeks and how the company addresses the challenges posed by the war in the Middle East.
(Photo: courtesy of McDonald’s)
