Raphael Stevens

After a challenging second quarter, McDonald’s executives are looking ahead to how they can recapture consumers with value offerings as they push for an extension of the current $5 value meal platform.
The company reported results that missed analysts’ estimates Monday on the top and bottom lines, and same-store sales declined in all segments, including its key U.S. market, falling 0.7%.
“We continue to lose traffic share of low-income consumers,” the company’s U.S. president Joe Erlinger wrote to the U.S. system, in a memo obtained by CNBC. 

A McDonald’s fast-food restaurant in Manhattan, New York, on July 6, 2024.
Beata Zawrzel | Nurphoto | Getty Images

After a challenging second quarter, McDonald’s executives told restaurant operators and analysts they are refocusing on how to recapture consumers with deals as they pushed for an extension of the its $5 value meal platform.
In a memo to the U.S. system obtained by CNBC on Monday, the company’s U.S. president Joe Erlinger said McDonald’s struggled to sell diners on affordability, adding that he expects “industry and competitive challenges” to continue throughout the year. Erlinger encouraged operators to look ahead to building momentum for next year, adding that “channeling a long-term mindset is crucial” to the company’s success. 

“Reversing the narrative and re-establishing our position as the leader on value and affordability is possible, but it cannot be done overnight,” he wrote. “It will happen through sustained and coordinated actions that show the customer we’re on their side.”
The company reported results that missed analysts’ estimates Monday on the top and bottom lines. Same-store sales declined in all segments, including its key U.S. market, where they fell 0.7%. The company had forecast the challenges last quarter, and the stock rose Monday on the results.
Erlinger also acknowledged areas where the company was “falling short” in the U.S. this quarter. He noted that same-store guest counts were negative for the fourth straight quarter, and declines in the number of items per transaction hit check averages.
“We continue to lose traffic share of low-income consumers,” he wrote. But he added that trial rates for the value meal launch were highest among low-income consumers, and sentiment around McDonald’s value has started to improve.
The company will extend its $5 value meal beyond its initial four-week window in most of its U.S. markets as the fast-food giant says the offer is driving traffic back to restaurants. In a memo to the U.S. system obtained by CNBC last week, executives wrote that nearly every business unit, encompassing 93% of its restaurants, voted to extend the promotion past its original end date late this month. The memo said the majority of locations will extend through August, or plan to vote on whether to do so.

Erlinger seemingly alluded to upcoming decisions around extensions and future value offerings in Monday’s memo. On the call, executives said franchisees in the U.S. are in a strong financial position to invest in the value offering and they are working with owners now to assess its overall profitability.
In the memo, Erlinger wrote, “Value and affordability have been part of our DNA since we first opened our doors, but we have an affordability gap to close and we must continue to take actions that show our customers we are listening. … We have a solid plan for the second half of the year, but there are several important decisions coming up that will set us up to compete and build greater momentum these final five months and into 2025.”
McDonald’s did not immediately respond to CNBC’s request for comment.

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“Deadpool & Wolverine” hauled in $211 million during its domestic debut, the highest debut of 2024 and of an R-rated film ever.
It’s a promising development for the Disney-owned Marvel Studios, which has struggled to maintain box office momentum in the wake of 2019’s historic “Avengers: Endgame.”
President of Marvel Studios Kevin Feige has hired Joe and Anthony Russo, who helmed “Avengers: Infinity War” and “Avengers: Endgame” to direct the next two Avengers films.
Robert Downey Jr. is also returning. This time as Doctor Doom.

Robert Downey Jr. speaks onstage during the Marvel Studios Panel in Hall H at SDCC in San Diego, California on July 27, 2024.
Jesse Grant | Getty Images Entertainment | Getty Images

Editor’s note: This article contains spoilers for “Deadpool & Wolverine.”
Marvel is on the rebound.

After its worst performance of all-time at the box office last November, the studio is back on top with “Deadpool & Wolverine.” The 34th entrant in the Marvel Cinematic Universe hauled in $211 million during its domestic debut, the highest debut of 2024 and of an R-rated film ever.
It’s also the highest-opening MCU film since 2021’s “Spider-Man: No Way Home.”
It’s a promising development for the Disney-owned Marvel Studios, which has struggled to maintain box office momentum in the wake of 2019’s historic “Avengers: Endgame.” A push for quantity of theatrical titles and streaming series led to a decline in quality, and audiences balked.
“Welcome to the MCU,” Reynold’s Deadpool says to Hugh Jackman’s Wolverine in the film, which arrived in theaters over the weekend. “You’re joining at a bit of a low point.”
That low point is 2023’s “The Marvels,” which generated the lowest domestic opening ($46.1 million) and lowest global box office haul (under $200 million) for the MCU ever.

At the same time Marvel Studios was still reeling from pandemic-related production shutdowns and dual Hollywood labor strikes. Then, its heir apparent Jonathan Majors was convicted of misdemeanor assault and harassment, leading to his firing and questions about the future of the villainous Kang.
However, with the recent success of “Deadpool & Wolverine” and several strategic hires, Marvel looks to be on its way to righting the ship. And that’s good news for a studio that has generated more than $30 billion in box office since 2008. The MCU is the highest-grossing film franchise of all time and one of the most consistent ticket sales drivers in cinematic history.

Marvel-ous weekend

Kevin Feige, president of Marvel Studios, has brought back Joe and Anthony Russo — the writing and directing duo behind “Captain America: The Winter Soldier,” “Captain America: Civil War,” “Avengers: Infinity War” and “Avengers: Endgame” — and tapped Iron Man himself, Robert Downey Jr., to take on the role of Doctor Doom.
As part of the studio’s San Diego Comic Con presentation on Saturday, Feige announced that the Russo brothers would helm “Avengers: Doomsday” (previously titled “Avengers: Kang Dynasty) and “Avengers: Secret Wars,” due out in 2026 and 2027, respectively.
“Deadpool & Wolverine” is the only MCU film release of 2024, but 2025 will see “Captain America: Brave New World,” “Thunderbolts*,” “The Fantastic 4: First Steps” and “Blade.”

Ryan Reynolds and Hugh Jackman star in Marvel’s “Deadpool & Wolverine.”

Where Deadpool and Wolverine fit into Marvel’s upcoming slate is unknown — both characters survive the latest installment and remain in Deadpool’s universe, separate from the rest of the MCU. “Deadpool & Wolverine” seemingly hints that Jackman will return as Wolverine in future films.
“Fox killed him. Disney brought him back,” Deadpool tells the audience in his typical, fourth-wall breaking fashion. “They’re gonna make him do this until he’s 90.”
Many speculate the duo will return for “Secret Wars,” a comic book story arc first seen in the 1980s and later revisited in 2015. The storyline involves the collision of alternative universes, their destruction and pieces of those universes being knit back together into something called “Battleworld.” It is also where Marvel could incorporate the X-Men.
How the MCU will handle “Secret Wars” is firmly under wraps, but the Russo brothers teased Downey’s Doctor Doom will play a big part in its events. At the very least, fans of the franchise now have a better sense of the direction for the franchise.
“Like Robert said, ‘New mask, same task,” Anthony Russo said during Saturday’s San Diego Comic Con panel, echoing Downey’s words. “And the task for all of us, including everybody in this room, together, is for us to help create the greatest possible experience that we can all have together in a movie theater.” More

McDonald’s executives acknowledged during an earnings call Monday that diners consider the company’s prices too high, and said they are taking a “forensic approach” to evaluating prices.
Amid a broader consumer pullback and increasing prices, fast-food chains have had a difficult time drawing in lower-income diners.
The company’s recent $5 value meal offering was initially successful in bringing lower-income diners back to stores but has yet to translate into higher sales, company executives said.

A McDonald’s Big Mac in Bangkok, Thailand, on June 8, 2024.
Lauren Decicca | Getty Images

McDonald’s executives acknowledged Monday that diners consider the company’s prices too high as lower-income consumers balk after years of high inflation.
During the company’s second-quarter earnings call Monday, executives said they are taking a “forensic approach” to evaluating prices and trying to create value. The company posted worse-than expected second-quarter earnings as same-store sales declined across every division.

“We recognize that in several large markets, including the U.S., we have an opportunity to improve our value execution. Consumers still recognize us as the value leader versus our key competitors but it’s clear that our value leadership gap has recently shrunk. We are working to fix that with pace,” McDonald’s CEO Chris Kempczinski said on the company’s earnings call.
Kempczinski said price increases have made consumers reconsider buying habits.
As consumers pull back spending amid increasing prices, fast-food chains have had a difficult time drawing in lower-income diners. More than 60% of respondents to a recent LendingTree survey said they have cut back their fast-food spending because it is too expensive.
McDonald’s executives on the earnings call said lower-income diners have not been moving from the chain to other fast-food restaurants, but instead have been eating out less frequently across most of the company’s markets globally. The company saw consumers pull back in not just the U.S. but globally, particularly families in European markets.
“At the end of the day, we expect customers will continue to feel the pinch of the economy and a higher cost of living for at least the next several quarters in this very competitive landscape,” McDonald’s U.S. President Joe Erlinger said. “So we believe it is critical for us to consider these factors in order to grow market share, and return to sustainable guest count-led growth for the brand.”

McDonald’s last week decided to extend its $5 value meal offering past its initial four-week window, saying it brought customers back to its restaurants. Ninety-three percent of company franchisees committed to extending the offer further into the summer.
June 25, the launch day of McDonald’s $5 meal, drew 8% more visits than the average Tuesday in 2024 so far and the pattern repeated in the following days as the chain exceeded year-to-date daily visit averages, according to a report from Placer.ai.
Erlinger said the number of $5 meal deals sold topped expectations. The rates were highest among lower-income consumers, and the deal improved brand perceptions around value affordability. The offer also began to increase guest count growth, but it has not yet translated into sales increases, company executives said on the call.
The $5 value meal was rolled out only days before the second quarter ended.
“For 70 years we’ve led on value because it’s what the brand stands for and frankly … we have an underlying competitive advantage that we can buy at a lower price than anybody else in our industry,” Kempczinski said. “The point is, we know how to do this. We wrote the playbook on value and we are working with our franchisees to make the necessary adjustments.”
— CNBC’s Amelia Lucas and Kate Rogers contributed reporting.

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U.S. airlines are cutting their growth plans for the second half of the year.
Over the last week, airlines shaved a point of capacity off their growth plans for the fourth quarter, according to Deutsche Bank.
Money-losing low-cost airlines are under increasing pressure to cut growth plans and cull unprofitable routes.

Airplanes from United and JetBlue and Delta populate the taxiway at Laguardia Airport in the Queens borough of New York City. 
Bruce Bennett | Getty Images

U.S. airlines are reducing their capacity through the end of the year in a bid to cool an oversupplied domestic market that has led to lower fares and reduced profits despite strong summer travel demand. For passengers, that could mean higher fares are on the way.
Over the last week, U.S. airlines had “one of the industry’s largest week-over-week capacity reductions,” shaving almost 1% off of their capacity planned for the fourth quarter, Deutsche Bank said in a note Sunday. Airlines now expect to grow flying about 4% year over year during the final three months of the year.

“Despite the sizeable overall reduction, we expect to see further cuts in the weeks ahead as carriers are expected to continue to refine their schedules,” Deutsche Bank airline analyst Michael Linenberg wrote in the note.
U.S. airline executives have noted strong demand but a domestic market that’s awash in flights, forcing them to dial back growth plans, which could drive up fares. The latest U.S. inflation report earlier this month showed airfare in June fell 5.1% from a year earlier and 5.7% from May.
Reducing capacity could drive up fares for consumers and boost airlines’ bottom lines, if travel demand holds up. Getting fares in the market that are profitable to airlines but palatable to consumers is crucial for the industry as consumers have pulled back on spending in other areas.

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The NYSE Arca Airline Index’s performance compared with the S&P 500.

Third-quarter outlooks from Delta and United earlier this month disappointed investors, but their CEOs said they expected capacity pullbacks across the U.S. industry to materialize in August, helping results. Southwest Airlines forecast a potential drop in third-quarter unit revenue, a measure of how much money an airline brings in for the amount it’s flying. The airline said last week it will finally ditch its iconic open-seating model and introduce extra-legroom seats to drive up revenue.
American Airlines on Thursday reported a 46% decline in its second-quarter profit and said it plans to dial back its capacity growth in the coming months, expanding less than 1% in September over last year.

“That excess capacity led to a higher level of discounting activity in the quarter than we had anticipated,” CEO Robert Isom said on an earnings call last week. Overall, American plans to grow 3.5% in the second half of the year after expanding about 8% in the first six months of the year.

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Low-cost and discount airlines have been more aggressive in cutting unprofitable routes and scaling back capacity. Those carriers plan to contract 2.2% in the fourth quarter from the same period of 2023, Deutsche Bank said.
JetBlue Airways, for example, has culled money-losing routes this year and deployed aircraft to more popular city pairs. The carrier is scheduled to report results before the market opens on Tuesday.
Spirit Airlines, meanwhile, warned of a wider-than-expected loss for the second quarter after nonticket revenue, which accounts for fees like checked bags and seating assignments, came in lighter than expected.

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Family offices are increasingly offering lucrative shares of equity and deal profits to staff amid a growing battle for talent, according to a top family office attorney.  
Family offices are surging in size and number, and competing more directly with private equity firms and venture funds for top staff.
There are three common ways single-family offices are paying staff with deal and equity plans.

Thomas Barwick | Digitalvision | Getty Images

A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high net worth investor and consumer. Sign up to receive future editions, straight to your inbox.
Family offices are increasingly offering lucrative shares of equity and deal profits to staff amid a growing battle for talent, according to a top family office attorney.  

As family offices surge in size and number, and compete more directly with private equity firms and venture funds for top staff, they’re sweetening their compensation plans. Along with salaries and bonuses, many are now offering equity stakes and various forms of profit-sharing to give employees more upside and incentives.
Patrick McCurry, partner at McDermott Will & Emery LLP based in Chicago, who works with single-family offices, said family offices have to adapt to a more competitive hiring landscape.
“There is a war for talent,” McCurry said. “Family offices are competing for talent against each other, and against traditional private equity, hedge funds and venture capital.”
Family offices, the private investment arms of single families, are also shifting to profit shares as a way to better align the incentives of the staff with the family.
“It helps get everyone rowing in the same direction,” McCurry said.

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In an article in the latest UBS Family Office Quarterly, McCurry said there are three common ways single-family offices are paying staff with deal and equity plans.
1. Profits interest
A profits interest gives an employee a share of upside in a deal or basket of deals. So if the family office buys a private company for $10 million and sells it for $15 million, the employee may get a share (say 5% or 6%) of the $5 million profit, or profit above a target or “hurdle.” If there is no profit, the employee gets no share. “Basically they don’t participate unless there is growth,” McCurry said.
They also save on taxes. Since the profit is a capital gain, the employee typically pays the long-term capital gains rate — which tops out at 20% — rather than the ordinary income rate, which can reach 37%.
2. Co-invest
A co-investment allows an employee or group to put their own money in an investment, effectively investing in a deal alongside the family. Often the family will lend a portion of the money to the employee for the investment, known as a leveraged co-investment. So an employee may put $100,000 into an investment, borrow another $200,000 from the family, and get a $300,000 stake.
If the deals make no profit, the employee loses their investment and potentially has to repay part of the loan. Family office owners like co-investments since it encourages employees to make less risky deals. They often pair co-investments with profit shares to create both upside and potential downside to staff.
“With co-invests you get a downside so you could get fewer ‘moonshot’ deals that would be high risk,” McCurry said.
3. Phantom equity
If a family office is too complicated, with dozens of trusts, partnerships and funds that make it hard to issue profit shares or co-investments, they can sometimes offer phantom equity — notional shares of a basket of assets or fund or company that track performance without actual ownership.  
Phantom equity can be like a 401(k) plan that’s deferred tax free. But eventually it’s usually taxed at ordinary income rates, so it can be less attractive to the employee.
“It’s not as common, but it’s mainly used for simplicity,” McCurry said.
Because they serve a single family, family offices have more flexibility than many companies when it comes to designing pay plans. Yet McCurry said family offices that want to compete for talent need to start offering more forms of equity.
“There is a crowd effect,” he said. “The more family offices start offering it, the more employees expect it. You don’t want to be the outlier when everyone across the street is offering it.”
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The U.S. market – a profit engine for most automakers – is normalizing after years of record high prices, low vehicle inventories and resilient demand.
Wall Street has been waiting for that set of circumstances for some time, with the cyclical nature of the auto industry ushering in a down period.
The industry challenges add to individual issues for each automaker as well as uncertainty around the adoption of all-electric vehicles.

New Jeep vehicles sit on a Dodge Chrysler-Jeep Ram dealership’s lot on October 03, 2023 in Miami, Florida.
Joe Raedle | Getty Images News | Getty Images

DETROIT – The last time shares of Ford Motor dropped by more than 18% in a day, as they did last week, the U.S. automotive industry was on the brink of bankruptcy during the Great Recession.
Ford, which avoided bankruptcy in 2008-2009, is far from any sort of such disaster, but the freefall in shares after the company missed Wall Street’s earnings expectations is the leading example of the uphill battle automakers face for the remainder of the year.

The U.S. market – a profit engine for most automakers – is normalizing after years of record high prices, low vehicle inventories and resilient demand. Inventories, especially for the Detroit automakers, are rising, and vehicle pricing is slowly declining.
Wall Street has been waiting for that set of circumstances for some time, with the cyclical nature of the auto industry ushering in a down period.

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Ford, GM and Stellantis shares

“Investors who think autos can outperform on + earnings beats and buybacks should think again. Auto fundamentals may be peaking (see rising incentives and delinquencies). Eventually this can catalyze lower spending and” mergers and acquisitions, Morgan Stanley analyst Adam Jonas said Friday in an investor note.
Jonas’ comments came after the firm downgraded GM from overweight to equal weight last week, adding “auto remains one of the more challenged industries in the world in terms of competition, excess capacity, cyclical and secular risks.”
The industry challenges add to individual issues for each automaker as well as uncertainty around the adoption of all-electric vehicles, which automakers have invested billions of dollars in and which largely remain unprofitable.

Shares of Ford had their worst week since March 2020, down 20% to close Friday at $11.19. GM was down 8.7% last week to $44.12. Stellantis fell 12.6% last week to $17.66.

GM

For General Motors, investors balked at pullbacks in growth businesses, waning upside during the second half of the year and fear that the automaker’s earnings power has peaked, according to Wall Street analysts.
Selling more EVs is one reason that GM, which has raised its annual financial guidance twice this year, expects the second half to underperform the first. The company projects its adjusted second-half earnings to be between $4.7 billion and $6.7 billion, or $3.82 and $4.82 adjusted per share. That compares with $8.3 billion, or $5.68 adjusted earnings per share, through the first half of the year.
The automaker also forecasts a 1% to 1.5% decline in vehicle pricing as well as $1 billion in additional expenses — including $400 million in additional marketing costs to support vehicle launches. GM is looking to increase production of money-losing EVs, as it aims to make the vehicles profitable on a production, or contribution-margin basis, by the end of the year.

Analysts also have concerns regarding GM’s continued losses in China, which has historically been a profit engine for the company. The automaker’s Chinese operations posted an equity loss of $104 million – the unit’s second consecutive quarterly loss after hitting a roughly 20-year low in 2023.
“We have been taking steps to reduce our inventories, align our production to demand, protect our pricing, and reduce fixed costs. But it’s clear the steps we have taken, while significant, have not been enough,” GM CEO Mary Barra said Tuesday during the company’s earnings call. “We expect the rest of the year will remain challenging.”
The automaker is still expected to post strong results during the second half of the year, build upon its strong cash flow position and conduct billions in share repurchases to return money to investors.

Ford

The same can’t be said unilaterally for GM’s closest crosstown rival Ford, which pushed back against any share repurchasing, instead relying on the company’s dividend to award investors.
Several Wall Street analysts noted the share repurchase difference between the companies, citing the Ford family’s voting control of the board and special shares.
“Given elevated cash balance, there had been hope for a special dividend or even a buyback. In hindsight, this was probably just investor pressure in comparison to GM’s policy. But, Ford doesn’t seem like they will budge off their stance,” UBS analyst Joseph Spak said Thursday in an investor note.

The new Ford F-150 truck goes through the assembly line at the Ford Dearborn Plant on April 11, 2024 in Dearborn, Michigan. 
Bill Pugliano | Getty Images

Ford expects adjusted earnings during the second half of the year to be between $2 billion and $3 billion, down from $5.5 billion during the first half of the year.
The company reconfirmed its 2024 guidance despite coming in a whopping 21 cents below adjusted earnings per share expectations for the second quarter. The automaker reported an additional $800 million in unexpected warranty costs compared with the prior quarter.
To achieve its second-half results, Ford CFO John Lawler altered the company’s guidance for the last six months of the year for its traditional Ford Blue and commercial Ford Pro operations. Expectations for full-year EBIT are up for Ford Pro, to a range of $9 billion to $10 billion, on further growth and favorable product mix. Guidance is down, however, for the company’s Ford Blue segment, to a range of $6 billion to $6.5 billion, reflecting the higher warranty costs.
“We’re disciplined with capital, and we have the right portfolio of products and we are delivering consistent cash generation to reward our shareholders,” Lawler told investors Wednesday. “We are relentlessly seeking out new ways to make our business better and remain focused on driving improvements in both quality and cost.”

Stellantis

Transatlantic automaker Stellantis arguably faces the most challenging second half of the year, particularly regarding its U.S. operations.
Speaking to the media, Stellantis CEO Carlos Tavares said that many of the firm’s problems stem from its U.S. operations, which he previously said were being impacted by “arrogant mistakes” around vehicle inventory levels, manufacturing and sales strategies.
Last year, Stellantis was the only major automaker in the U.S. to report a decline in sales compared with 2022.
During the first half of this year, the firm’s U.S. sales were down about 16%. Its North American market share was 8.2%, down 1.8 percentage points.

Stellantis CEO Carlos Tavares holds a press conference ahead of visiting the Sevel automaker’s plant, Europe’s largest van-making facility, in Atessa, Italy, January 23, 2024. 
Remo Casilli | Reuters

Despite the ongoing problems, Stellantis reconfirmed its 2024 guidance for double-digit adjusted operating income margin, positive industrial free cash flow and at least 7.7 billion euros in capital return to investors in the forms of dividends and buybacks.
Through the first half of the year, Stellantis’ adjusted operating margin was 10%. Its free cash flow was negative 392 million euros and its capital return was 6.65 billion euros.
Tavares expects to be able to achieve those targets with the help of 20 new model launches this year, correcting the problems in the U.S. and additional price cuts to increase sales. He also did not rule out additional job cuts.
“This is a very tough industry, a very tough period and everybody has to fight for performance,” Tavares said. “We will have to work hard to deliver that performance.”
– CNBC’s Michael Bloom contributed to this report.

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McDonald’s missed second-quarter earnings and revenue estimates.
The company’s same-store sales fell for the first time since the fourth quarter of 2020.
McDonald’s is leaning on value meals to bring back customers as it deals with a worsening consumer pullback.

A McDonald’s restaurant is viewed on July 22, 2024 in Burbank, California.
Mario Tama | Getty Images

McDonald’s on Monday reported quarterly earnings and revenue that missed analysts’ expectations as same-store sales declined across every division.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

Earnings per share: $2.97 adjusted vs. $3.07 expected
Revenue: $6.49 billion vs. $6.61 billion expected

The fast-food giant reported second-quarter net income of $2.02 billion, or $2.80 per share, down from $2.31 billion, or $3.15 per share, a year earlier. Excluding charges related to the future sale of its South Korean business and other items, McDonald’s earned $2.97 a share.
Its quarterly revenue of $6.49 billion was about flat compared with the year-ago period.
McDonald’s same-store sales shrank 1%, missing StreetAccount estimates for growth of 0.4%. It’s the first time companywide same-store sales have fallen since the fourth quarter of 2020.
In the U.S., McDonald’s same-store sales decreased 0.7% for the quarter. A year ago, the chain reported U.S. same-store sales growth of 10.3%, thanks to its popular Grimace Birthday Meal.
But in the 12 months since, more consumers have cut back their restaurant spending, particularly at fast-food chains, which they no longer see as a good deal. McDonald’s said foot traffic to its U.S. restaurants fell during the quarter.

Executives previously warned that the competition for customers had become more fierce as the consumer environment weakened. McDonald’s is leaning into discounts to bring back diners. The chain launched a $5 meal deal in late June, five days before the end of the quarter.
A week ago, the company told its U.S. system that it plans to extend the value meal past the planned four-week runtime and said that it’s bringing back customers.
McDonald’s is trying to lure in diners outside of the U.S., too. Its international operated markets division, which includes large segments like France and Germany, saw its same-store sales slide 1.1% in the quarter.
The company’s international developmental licensed markets unit, which includes China and Japan, reported same-store sales declines of 1.3%. McDonald’s is still dealing with the fallout from boycotts of the brand in the Middle East, and sales in China continue to struggle.
— CNBC’s Robert Hum contributed to this report.

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