McDonald’s announced on Tuesday a 1.8% drop in net profits in the third quarter of 2019 as a result of investment impairment charges linked to a joint enterprise in India and stiff competition in the United States.
Q3 profits amounted to 1.61 billion dollars (1.45 billion euros), while the adjusted share profit was 2.11 dollars, markedly less than the average 2.21 dollars forecast by financial analysts.
The company’s turnover increased by 1.14% to 5.43 billion dollars (4.88 billion euros) but was still under the forecast of 5.49 billion dollars.
McDonald’s results caused a drop of over 3% on its shares in early electronic trading on Wall Street.
Activity and profitability trends have been disappointing in the United States: sales at comparable group structure (in number of stores) increased by just 4.8%, way below the 5.17% the analysts had expected. This suggests that McDonald’s is losing market share to competitors like Burger King and Yum Brands.
Its rivals have been offering vegetarian hamburgers and nuggets, increasingly loved by consumers, in recent months.
Burger King became the first fast food chain to venture into this niche when it launched a meatless, and equally tasty, version of its emblematic Whopper in April. A few months later, KFC in collaboration with Beyond Meat, began selling chicken wings and nuggets made from vegetable protein.