McDonald's Stocks Plunge as US Sales Lag Amid Rising Costs
McDonald's is struggling to reinvigorate its US stock price, which has plummeted nearly 31% from its February high. This decline marks McDonald's worst annual return since 2002.
The company guided for 'slightly negative' US sales in the current quarter and reported a mere 0.8% sales growth in the last quarter, its slowest pace in over a year.
Long-standing customer complaints about high menu prices and declining in-store experiences have been exacerbated by recent attempts at value offerings that have had mixed results. An $8.5bn multi-year plan to improve service and food quality has sparked concerns it may erode profits, leading to a fresh sell-off in shares.
According to Jacob Aiken-Phillips of Melius Research, 'Their prices have gone up substantially, and it’s no longer viewed as the best value in food.' He notes that customers can find similar experiences at other restaurants like Texas Roadhouse for comparable prices.