Can McDonald's shake its not-so happy year?
For McDonald's (MCD) executives, 2014 is proving to be full of "headwinds." For investors, it's proving to be a year full of stock-sapping frustrations.
The company on Tuesday said that global same-store sales, an important yardstick for the health of restaurant chains, slipped 3.7 percent in August, the worst performance by that measure in more than a decade. In the U.S., same-store sales dipped 2.8 percent last month, marking the fourth straight month of declines.
McDonald's is facing problems on several fronts. In Asia, it's dealing with the fallout of a meat-supplier scandal, with OSI Group investigated for selling expired meat. Closer to home, the restaurant chain's efforts to draw back customers with remodeled stores and limited-time offers isn't gaining much traction. Adding to its woes was a July ranking from Consumer Reports that cited its core product -- burgers -- as the worst-tasting out of all U.S. burger chains.
"During August, McDonald's global business faced several headwinds that impacted sales performance," McDonald's chief executive officer Don Thompson said in a statement.
Shares in McDonald's have lost 4.7 percent of their value this year, compared with an 8.3 percent rise in the S&P 500 over the same period.
Those headwinds include image problems for the chain, including last week's protests from fast-food workers who are demanding higher wages. The "Fight for 15" movement claims that McDonald's and other fast-food employers are failing to pay their employees a living wage.
Meanwhile, some diners are opting for rival restaurant chains. Chipotle (CMG), for instance, is luring some health-conscious consumers who like the company's tagline of "food with integrity," which means serving up pork that the company says was "naturally raised."
Aiming to convince families to give the restaurant another chance, McDonald's has updated its Happy Meal, adding healthier choices such as Yoplait Go-Gurt yogurt and apple slices. The company also created a new Happy Meal icon. Unfortunately for McDonald's executives, the anthropomorphized box was derided by some as "scary" and "terrifying."
At times, it seems as if McDonald's has become the restaurant chain that Americans love to hate.
The struggles have led to an executive shuffle, with McDonald's replacing U.S. president Jeff Stratton with former executive Mike Andres, who rejoined the fast-food chain after serving as CEO of Logan's Roadhouse.
There are some indications the troubles may linger, however. The company said on Tuesday that its problems in China will impact its third-quarter results by 15 cents to 20 cents a share, thanks to lost sales and expenses to deal with the scandal.
The company will release third-quarter results on Oct. 21.