Expect significant new tariffs on Chinese imports and moderate levies on goods from other nations , as President-elect Donald Trump rolls out his protectionist agenda. However, with his preference for chaotic policymaking and sudden shifts , there’s uncertainty on how soon these import taxes will actually hit. Dubbed “ Tariff Man ,” Trump aims to use tariffs both strategically and tactically . He’s mentioned taxing all Chinese goods up to 60% and potentially setting 10%-20% tariffs on imports globally , but details on these plans remain vague . Key players within Trump’s team are divided: Robert Lighthizer , a staunch tariff advocate, sees permanent duties as crucial to balance US trade , while others, like billionaires John Paulson and Scott Bessent , view tariffs as temporary leverage. Trump’s previous administration had mixed feelings, especially on national security-related trade limits , which he sometimes dismissed, favoring an “open for business” approach. High-profile busin
McDonald's reported a surprising drop in global sales on Monday, marking its first decline in 13 quarters. The decline is attributed to consumers seeking lower-priced menu options and avoiding higher-priced items like the Big Mac amid persistent inflation.
Key Takeaways:
Sales Decline: Global comparable sales fell 1% in the second quarter, against expectations of a 0.5% increase. This is McDonald's first global sales drop in more than three years. Overall revenue, however, rose by 1%.
Consumer Behavior: Inflation has led lower-income consumers to opt for more affordable food options at home. This shift has pressured fast-food chains to rely on value meals to attract customers.
US Performance: US comparable sales fell 0.7% for the quarter ended June 30, compared to a 10.3% increase a year ago. The $5 meal deal launched in June performed above expectations and is set to continue into August.
International Markets: Sales in international markets, which constitute nearly half of McDonald's revenue, dropped 1.1%, with notable weakness in France. The business segment where local partners operate restaurants saw a 1.3% decline in sales, driven by a slower recovery in China and impacts from the Middle East conflict.
Strategic Adjustments: McDonald's is committed to protecting profitability by being selective with price increases. The company maintained its 2024 forecast for an operating margin in the mid-to-high 40% range and its capital expenditure budget of up to $2.7 billion, focusing on new restaurants in the US and international markets.
Broader Market Context: The results align with recent comments from Coca-Cola's CEO about softness in away-from-home channels in North America, indicating fewer people dining out. McDonald's and other major brands like Starbucks have also been impacted by consumer boycotts linked to geopolitical conflicts.
Earnings Miss: McDonald's earned $2.97 per share on an adjusted basis in the second quarter, missing expectations of $3.07.
Despite the drop in sales, McDonald's shares rose 4% in early trading as the market reacted to the company's strategic adjustments and efforts to attract cost-conscious consumers.
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