McDonald’s Disappoints with Q1 Results, Expects No Improvement in the Short-Term (MCD)
McDonald’s Corp. (NYSE: MCD) reported disappointing fiscal first quarter results on Friday, citing global macroeconomic weakness and said that it will not hesitate in lowering menu prices in order to attract customers.
Amid global economic uncertainty, consumers are curbing their discretionary expenses and the only way out of this challenge is to entice customers back to its stores by constantly rolling out new menu items, the Company said.
McDonald’s Inc, Which is world’s largest burger chain, said that sales at established stores or same-store-sales fell 1% in the fiscal first quarter while it declined 1.2% in the U.S. Same-store-sales is considered as a key gauge on retailer’s performance as it includes sales impact from only those stores that were opened for at least 13 months. Same-store-sales in China plunged 4.6% as customers are still reluctant to eat chicken products following an investigation from regulators which found that rival Yum Brands’ certain KFC products contained large amount of chemicals.
Although revenue edged up a tad, profit was mainly flat compared to year-earlier quarter.
The fast food chain does not anticipate improvement in the macroeconomic environment in the short term but said that it will keep introducing new menu items to lure customers, all through the year. Besides the chain will also remodel more than 1,500 outlets around the world, which includes 800 in the U.S.
For the recently concluded quarter, the Company reported earnings of $1.27 billion or $1.26 a share which was a tad better than $1.267 or $1.23 a share, in the year earlier quarter. Revenue during the quarter edged up 0.9% to $6.61 billion. Analysts’ consensus estimate was for earnings $1.27 a share on revenue of $6.59 billion.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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