McDonald's Sales Disappoint Amid Turnaround Efforts
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NEW YORK (CBSMiami/AP) — McDonald's reported disappointing sales growth in their second quarter as they continue to tout their all-day breakfast menu and its turnaround efforts.
Shares were down 3 percent before the opening bell.
The Oak Brook, Illinois-based company said sales rose 1.8 percent at established U.S. locations in the period. Analysts expected growth of 3.4 percent, according to FactSet.
McDonald's noted that it was still the fourth straight quarter in which comparable-store sales rose in the U.S., despite "softening industry growth." The company did not say how much of the sales increase — if any — was from a rise in customer visits, rather than factors such as higher pricing.
Last week, Starbucks said its customer traffic was flat from a year ago, while Dunkin' Donuts said traffic slipped.
Globally, McDonald's said sales rose 3.1 percent at established locations.
McDonald's Corp. is trying to win back customers under CEO Steve Easterbrook, who took over last year. The company has cited the launch of its all-day breakfast menu last fall for helping improve sales. To keep momentum going, McDonald's plans to expand the offerings later this year.
The company, which has more than 36,000 locations around the world, is also working on improving perceptions about the quality of its food in the U.S. Those efforts have included switching to butter from margarine for its Egg McMuffins, and searing its beef longer to improve the taste. Like other major fast-food chains, McDonald's is trying to shake its image for serving unhealthy, processed food as it faces pressure from smaller players promising better alternatives.
For the quarter, McDonald's earned $1.09 billion, or $1.25 per share, including a 20-cent negative impact from restructuring charges. Analysts expected $1.39 per share, not including one-time items.
Total sales were $6.27 billion, in line with Wall Street forecasts, according to FactSet.