Profits slip at McDonald's on weaker US, EU sales

Tuesday 22 July 2014 14.41
McDonald's said it would continue to focus on customer service, marketing and its 'core menu' in an attempt to reverse falling sales
McDonald's said it would continue to focus on customer service, marketing and its 'core menu' in an attempt to reverse falling sales

Fast-food giant McDonald's has said profit slipped in the second quarter amid fairly flat global sales and continued weakness in its domestic US performance.

McDonald's net earnings for the second quarter were $1.39bn, down 0.7% from the year-ago period.

That translated into adjusted earnings per share of $1.40, four cents below expectations.

The US restaurant chain characterised global comparable sales as "relatively flat" with lower guest traffic in all major segments.

Comparable sales dropped 1.5% in the United States and 1% in Europe, while they grew in the Asia/Pacific, Middle East and Africa segment by 1.1%, due in part to strong performance in China and some other markets.

In the wake of the results, the latest in a string of quarters with weak or negative sales growth, McDonald's said it is continuing to focus on improving customer service, boosting marketing and strengthening "core menu" and value offerings.

"Overall, 2014 is a year of strengthening the foundational elements of our business that are critical to enabling and advancing our longer-term strategies," said McDonald's chief executive Don Thompson. 

"While near-term results are expected to remain muted, sizable growth opportunities remain, and we are committed to pursuing these opportunities through continuous improvement in everything we do -- from the food we serve, to our engagement with our customers, to the management of our financial resources."

Revenues rose 1.4% to $7.1bn, below the $7.29bn projected by analysts.

Dow component McDonald's fell 2.2% to $95.45 in pre-market trade.