Fast food giant McDonald's issued a profit warning last night, lowering its 2002 earnings expectations on weak third-quarter sales and a more conservative outlook for the fourth quarter.
'The US marketplace continues to be extremely competitive and customers have many choices,' McDonald's chairman and chief executive officer, Jack Greenberg, said.
The company said it now forecasts earnings per share of $1.43 or more, before charges. Including charges, the company predicted earnings per share of $1.31 or more, compared with $1.25 in 2001. For the third quarter, the company said it expects earnings of 38-39 cents, compared with the consensus forecast of 42 cents.
The company also said system-wide sales for the first two months of the third quarter totaled $7.5 billion, up 3% from a year earlier.
The fast food giant said it plans to invest $300 million to $400 million in existing US franchised restaurants in 2003 in order to strengthen its competitive domestic position. As a result, the company said it will cut its share buy-back programme to $500 million and reduce global new restaurant openings in 2003.
