BEIJING — A recurring theme in the latest earnings reports from U.S. companies is the negative impact of the Chinese market.

For decades, multinational corporations have been drawn to China due to its vast and rapidly growing market, home to over four times the population of the U.S. However, slower economic growth, fierce local competition, and ongoing tensions with the U.S. are now affecting corporate earnings.

“Consumer sentiment in China is quite weak,” said Christopher Kempczinski, McDonald’s chairman, CEO, and director, regarding the quarter ending June 30.

“We’re seeing consumers in our industry and across various consumer sectors becoming very deal-focused,” he added. “In fact, there’s a lot of switching behavior, with consumers gravitating towards the best deals available.”

McDonald’s reported a 1.3% decline in sales for its international developmental licensed markets segment compared to the previous year. This segment includes China, where the company noted a sales decline, though specific figures were not disclosed.

Chinese companies have faced challenges as well. Nationwide retail sales in China grew by just 2% in June compared to the previous year.

In the mainland China stock market, known as A shares, earnings likely bottomed out in the first quarter and may “pick up mildly” in the second half of the year, according to Lei Meng, China equity strategist at UBS Securities, in a note dated July 23.

Several major U.S. consumer companies reflected this downward trend in their latest earnings reports.

Apple reported a 6.5% year-on-year decline in Greater China sales for the quarter ending June 29. Johnson & Johnson described China as a “very volatile market” and noted that a major business segment there had underperformed expectations.

General Mills CFO Kofi Bruce mentioned that after a “strong start” to the year, the quarter ending May 26 experienced a significant decline in consumer sentiment, which negatively impacted Haagen-Dazs store traffic and the company’s “premium dumpling business.” General Mills owns the Wanchai Ferry dumpling brand.

The company’s organic net sales in China fell by double digits during the quarter.

Regional performance is also influencing long-term corporate outlooks.

In China, “we don’t expect a return to the double-digit growth rates seen pre-COVID,” Procter & Gamble CFO Andre Schulten said during an earnings call last week. He anticipated that, over time, China would achieve mid-single-digit growth, akin to that in developed markets.

Procter & Gamble reported a 9% decline in China sales for the quarter ending in late June. Despite declining birth rates in China, Schulten noted that the company managed to grow baby care product sales by 6% and increase market share through a localization strategy.

Hotel operator Marriott International revised its revenue per available room (RevPAR) growth outlook for the year to 3% to 4%, largely due to expected continued weakness in Greater China and softer performance in the U.S. and Canada.

Marriott’s RevPAR in Greater China fell by about 4% in the quarter ended June 30, partly due to Chinese travelers opting for international trips and a weaker-than-expected domestic recovery. Nevertheless, the company highlighted that it signed a record number of projects in China during the first half of the year.

McDonald’s reaffirmed its goal to open 1,000 new stores annually in China.

Domino’s announced that its China operator, DPC Dash, aims to have 1,000 stores in the country by the end of the year. As of the end of June, DPC Dash had just over 900 stores and projected first-half revenue growth of at least 45%, reaching 2 billion yuan ($280 million).

Local competition remains fierce. Coca-Cola noted “subdued” consumer confidence in China, with volumes declining in contrast to growth in Southeast Asia, Japan, and South Korea. Asia Pacific net operating revenue fell by 4% year-on-year to $1.51 billion in the quarter ended June 28.

“There’s a general macro softness as the overall economy works through structural issues like real estate and pricing,” Coca-Cola Chairman and CEO James Quincey said on an earnings call. He attributed the drop in China volumes “entirely” to the company’s shift from unprofitable water products to sparkling water, juice, and teas. “I think the sparkling volume was slightly positive in China,” Quincey added.

Adapting to new product mixes and promotions was a common theme in U.S. companies’ earnings calls.

“We’ve continued to face more cautious consumer spending and intensified competition over the past year,” Starbucks CEO Laxman Narasimhan said on an earnings call. “Unprecedented store expansion and a mass segment price war at the expense of comp and profitability have also caused significant disruption to the operating environment.”

Starbucks reported a 14% drop in same-store sales in China for the quarter ended June 30, significantly steeper than the 2% decline in the U.S.

Chinese rival Luckin Coffee, whose drinks can cost half as much as those at Starbucks, reported a 20.9% drop in same-store sales for the quarter ended June 30. However, Luckin claimed that sales for those stores surged by nearly 40%, reaching $863.7 million. Luckin operates over 13,000 self-operated stores, primarily in China.

Starbucks reported that its 7,306 stores in China saw an 11% revenue drop to $733.8 million during the same quarter.

Both companies face numerous competitors in China, ranging from Cotti Coffee at the lower end to Peet’s at the higher end. Public disclosures about Peet’s China business described “strong double-digit organic sales growth” in the first half of the year.

Not all major consumer brands have reported difficulties.

Canada Goose reported a 12.3% increase in Greater China sales, reaching 21.9 million Canadian dollars ($15.8 million) in the quarter ended June 30.

Athletic shoe brands also reported growth in China, while cautioning about a potential slowdown ahead.

Nike reported a 7% year-on-year increase in Greater China revenue for the quarter ended May 31, representing nearly 15% of its business.

“While our near-term outlook has softened, we remain confident in Nike’s long-term competitive position in China,” said Matthew Friend, CFO and executive vice president of the company.

Adidas reported 9% growth in Greater China revenue for the quarter ended June 30, with the region accounting for about 14% of the company’s total net revenue.

CEO Bjorn Gulden noted on an earnings call that Adidas was gaining market share in China every month, but faced fierce competition from local brands. “Many of them are manufacturers that go straight to retail with their own stores,” he said. “The speed and price value they offer to consumers are different than before, and we are adjusting to that.”

Skechers reported 3.4% year-on-year growth in China for the three months ended June 30.

“We continue to believe China is on the road to recovery,” Skechers CFO John Vandemore said on an earnings call. “We expect a better second half of the year than what we’ve seen thus far, but we are watching things carefully.”