McDonald’s Corp. (MCD), the world’s largest restaurant chain, posted the worst same-store sales decline in more than a decade, hurt by sluggish demand in the U.S. and a health scare involving a Chinese supplier.
Sales at stores open at least 13 months fell 3.7 percent in August, the Oak Brook, Illinois-based company said in a statement today. Analysts estimated a 3.1 percent drop. McDonald’s also said that supplier problems in China will reduce third-quarter earnings per share by 15 cents to 20 cents.
McDonald’s, which has more than 14,200 U.S. locations, is facing challenges at home and abroad. Domestically, it’s been relying on discounts, limited-time offers and remodeled stores in a failed attempt to reignite growth. In China, meanwhile, the company’s meat supplier OSI Group LLC was investigated for changing the expiration dates on food, triggering shortages and a sales slump.
“There isn’t a lot of good news here,” Peter Saleh, a New York-based analyst at Telsey Advisory Group, said in an interview. “China is going to be under pressure for a while; their traffic is down in the U.S.”
The shares declined 0.4 percent to $92.12 at 9:54 a.m. in New York. The Big Mac seller had slumped 4.7 percent this year through yesterday, while the Standard & Poor’s 500 Restaurants Index lost 1.3 percent.
McDonald’s, which has more than 14,200 U.S. locations, has been struggling to lure... Read More
U.S. same-store sales dropped for the fourth straight month in August, falling 2.8 percent. Analysts projected a 2 percent decrease, the average of projections from Consensus Metrix.
Weak sales may pressure U.S. margin in the third quarter, the company also said today.Read the Full Article