Stocks to watch: These consumer names could face backlash in the Middle East

The strike by the United States on Saturday night against Iranian nuclear facilities at Fordow, Natanz, and Isfahan could impact certain multinational companies in the consumer sector, especially if an extended war continues in the region.

Last year, McDonald’s (NYSE:MCD) noted that it was negatively impacted by the war in the Middle East. “These external pressures certainly weighed on our performance for the quarter, with declines in comparable sales globally and across each of our segments,” highlighted management during a Chicago-based company’s earnings conference call.

Yum! Brands (NYSE:YUM) has repeatedly warned of Middle East backlash in its earnings reports and conference calls. The fast-food giant has attributed declines in sales and operational challenges directly to the ongoing conflict in the Middle East and related consumer boycotts. Notably, Yum! Brands’ (NYSE:YUM) CEO David Gibbs has stated that “top-line sales were impacted by the conflict in the Middle East region, with varying degrees of impact across markets in the Middle East, Malaysia and Indonesia.”

Meanwhile, Starbucks (NASDAQ:SBUX) warned in the past of “headwinds” and “ongoing boycotts” in the Middle East, Southeast Asia, and parts of Europe as factors that negatively affected sales and brand perception.

Procter & Gamble (P&G) has also referenced the Middle East as a source of sales pressure in the past. During a recent earnings conference call, the household products company reported that sales in the Middle East were negatively affected by ongoing geopolitical tensions and conflict in the region. The CFO specifically noted that volume trends in markets such as Egypt, Saudi Arabia, and Turkey “have remained soft since the start of the heightened tensions in the Middle East”. Colgate-Palmolive (NYSE:CL) and Kimberly-Clark (NASDAQ:KMB) have also mentioned in a more general way that geopolitical turmoil has impacted sales in international markets.

In the beverage sector, Coca-Cola (NYSE:KO) and PepsiCo (NASDAQ:PEP) have faced consumer boycotts in certain Middle East nations amid rising tension. Analysts have pointed to a loss of market share in Middle Eastern nations as a potential risk to global sales.