By Julie Jargon
McDonald's Corp. said its same-store sales in the U.S. fell
again last month, extending its longest stretch without comparable
growth in its core market in more than a decade.
The world's largest restaurant company cited "ongoing
broad-based challenges" on Monday as it posted a 1% decline in May
in sales for U.S. restaurants open at least 13 months. That marked
the sixth month in the past seven when sales dropped in its largest
market by number of restaurants. For April, McDonald's said U.S.
same-store sales were flat from a year earlier.
The continued slump in May comes despite efforts to revive the
Golden Arches brand. McDonald's Chief Executive Don Thompson, who
is approaching his second anniversary at the helm, has said that
McDonald's has lost relevance with some consumers and is trying to
regain that.
McDonald's has been focusing on improving staffing at busy
times, updating Ronald McDonald and its Happy Meals and emphasizing
its breakfast and coffee offerings.
"McDonald's U.S. business is heightening its customer focus
through service, value and menu initiatives to stabilize results,"
the company said.
The recent slump in growth in McDonald's U.S. business is the
longest since it posted a string of 13 months of negative
same-store sales from February 2002 to March 2003, according to
Sanford Bernstein analyst Sara Senatore.
The company still has points of strength. Breakfast in the U.S.
remains a robust business for McDonald's despite new challenges
from rivals, analysts say, with no decrease in sales following the
high-profile launch in March of a breakfast menu by Yum Brands
Inc.'s Taco Bell unit.
And McDonald's global same-store sales rose 0.9% in May, driven
by strong growth in China, the U.K. and France.
To keep shareholders happy, McDonald's recently announced plans
to increase the amount of money it returns to investors through
stock buybacks and dividends.
McDonald's shares were down around 0.5% in midday trading on
Monday at $101.47 each. That is up more than 4% for the year, but
below its all-time high in April of last year.
Write to Julie Jargon at julie.jargon@wsj.com
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