By Chelsey Dulaney
McDonald's Corp. said a key sales metric fell a
worse-than-expected 2% in the U.S. during the second quarter, as
the promotions and featured items that the fast-food chain launched
to draw in customers fell flat.
Overall for the quarter, McDonald's reported profit and revenue
that fell less-than-expected.
Chief Executive Steve Easterbrook, who took the helm of the
struggling burger giant in March, called the results
"disappointing," but said the company is "seeing early signs of
momentum."
Shares of McDonald's, virtually flat over the past three months,
rose 1.5% in premarket trading.
"We have made meaningful progress since announcing the initial
steps of McDonald's turnaround plan in early May," Mr. Easterbrook
said in a news release.
The company added that it expects to see its sales at
restaurants open at least 13 months to grow in its current
quarter.
The results come as McDonald's looks to turn itself around after
two years of struggles, including changing consumer tastes in
America and food-safety issues in Asia.
Mr. Easterbrook has said he is working to turn McDonald's into a
"modern, progressive burger company." The company has made a number
of moves in recent months, including eliminating antibiotics from
chicken, introducing better burgers and customizable options and
emphasizing the freshness of its ingredients.
It is also considering offering all-day breakfast nationwide
starting in October, The Wall Street Journal reported this week.
McDonald's said Thursday that it is continuing local market tests
of all-day breakfast.
But Thursday's results are the latest sign that its efforts
haven't yet paid off. McDonald's said traffic was negative for all
its major segments during the quarter
Meanwhile, sales at stores open at least 13 months fell 0.7%
globally in the latest quarter, worse than the 0.4% analysts polled
by Consensus Metrix had expected. The 2% drop in the U.S. was worse
than the 1.5% drop Consensus Metrix had forecast.
McDonald's said its promotions and featured products didn't
receive the customer response it had hoped for, as competition also
remained an issue.
In the Asia-Pacific division, where it is struggling with
perception issues after food-safety scares in China and Japan,
comparable-store sales fell 4.5%, below the 3.4% decline analysts
had forecast.
European sales increased 1.2%, helped by strong performances in
the U.K. and Germany, thought analysts had forecast 1.5%
growth.
Overall, McDonald's reported a profit of $1.2 billion, or $1.26
a share, down from $1.39 billion, or $1.40 a share, a year
earlier.
Revenue slid 9.5% to $6.5 billion. Excluding currency impacts,
revenue would have been up 1%.
Analysts polled By Thomson Reuters had forecast $1.23 a share in
earnings and $6.45 billion in revenue.
McDonald's booked $45 million in restructuring charges related
to its turnaround efforts in the quarter.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
Access Investor Kit for McDonald's Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US5801351017
Subscribe to WSJ: http://online.wsj.com?mod=djnwires