Big Macs, Smaller Sales: McDonalds Records Another Month Of Poor Numbers
McDonald’s sales last month slipped in nearly every region, further amplifying the concern that the world’s largest fast-food chain can grow as quickly as before.
McDonald’s comparable-store sales decreased 1.9%, after increasing 6.7% a year earlier. Every region experienced decreased growth from last year.
The greatest decline came in Asia, Pacific, Middle East and Africa, where comparable-store sales fell by 9.5% (after growing by 7.3% in 2012). In Europe, a similar situation. Sales there dropped 2.1% (from 4% growth).
Americans’ love for McDonald’s cheap meals of french fries and hamburgers remained. U.S. sales rose by 0.9% (down from 7.8%).
“While January’s results reflect today’s challenging environment and difficult prior year comparisons,” says new CEO Don Thompson, “I am confident that our unwavering commitment to delivering an exceptional restaurant experience will enhance our brand’s relevance and drive long-term results.”
Shares of McDonald’s fell by 0.4% to $94.30.
McDonald’s sales growth have slowed in the last six months, adding pressure to the start of Thompson’s tenure. Thompson assumed the top job after serving as the company’s president, replacing the highly regarded Jim Skinner. Skinner transformed McDonald’s after he took command in 2004, adding healthy options to menus and ordering renovations for the restaurants.
Making it tougher for McDonald’s, Burger King and Wendy’s have taken a page from the McDonald’s playbook and added new premium food to menus. Other competition comes from new fast casual chains like Panera Bread and Chipotle Mexican Grill.
“The slowdown in sales also implies McDonald’s is losing share domestically while the category demand is contracting in several key international markets,” says Lazard Capital Markets’ Matthew DiFrisco, who rates the shares as Neutral.