McDonald's profit slips as US sales continue to suffer
OAK BROOK, Ill. - McDonald's Corp. said its profit slipped in the second quarter as sales in the U.S. continued to flag.
The world's biggest hamburger chain has been struggling to boost sales in its flagship market amid intensifying competition, changing eating habits and the persistent financial struggles of its lower-income customers.
In the U.S., sales at established locations fell 1.5 per cent for the period fewer customers came into its restaurants. The company, based in Oak Brook, Illinois, hasn't managed to raise the figure since October.
Executives say they're working to improve basics such as operational speed and service, but that they don't expect performance to change significantly in the near term.
CEO Don Thompson said the company was moving with a sense of urgency to improve its performance but acknowledged the concerns expressed by analysts about the pace of change during a conference call.
"This is not the kind of thing that I would say I sleep well at night," Thompson said.
Globally, McDonald's said comparable sales were "relatively flat" for the period. A stronger performance in the unit encompassing Asia, the Middle East and Africa helped offset a decline in Europe. For July, however, McDonald's said it expects the figure to be negative.
For the quarter ended June 30, McDonald's earned $1.39 billion, or $1.40 per share. That was short of the $1.43 per share expected by analysts surveyed by Zacks Investment Research.
A year ago, the company earned $1.4 billion, or $1.38 per share.
Total revenue rose 1.4 per cent to $7.18 billion. That missed Wall Street forecasts for $7.29 billion.
Shares of McDonald's, which is based in Oak Brook, Illinois, were down 2 per cent at $95.19 in premarket trading.
Shares have increased 52 cents, or 0.5 per cent, to $97.55 since the beginning of the year, while the Standard & Poor's 500 index has climbed 6.8 per cent.
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