Is McDonald's out of steam?


McDonald’s lost ground in its domestic turnaround effort at the end of 2016, with same-store sales for U.S. restaurants slipping 1.3% for the fourth quarter.

The company attributed the decline to tough comparisons with the year-ago quarter, when the rollout of all-day breakfast lit a rocket under sales.

It also noted that comparable sales rose 2.7% worldwide.

Overall, revenues for the fourth quarter slid 5%, to $6.03 billion, and net income ebbed by a percentage point, to $1.19 billion.

Traffic for the full year dropped 2.1%, according to a securities filing.

Some investors had speculated McDonald’s would have a tough time in sustaining its run of positive same-store sales because the brand had already deployed its most powerful sales weapons, the extension of breakfast and tweaks to its value menu. They have wondered what the chain has left to fuel the turnaround.

McDonald’s acknowledged it faces tough comparisons because of those moves, but contended that it laid a foundation in 2016 for continued recovery. It noted that significant changes were made to menus and restaurants, and that new technology was deployed.

Last year was one of significant activity for the brand. It announced plans to install self-serve kiosks in all domestic stores, began experimenting with riffs on its signature Big Mac, and tested such products as garlic-flavored french fries.

“I am confident that we're on the right path as we pursue our goal of being recognized by our customers as the modern, progressive burger company,” CEO Steve Easterbrook said in a statement.

McDonald’s net income for 2016 rose 3%, to $4.69 billion, on a 3% drop in revenues, to $24.62 billion.


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