McDonald’s stores in China are mostly company operated, and a report in The Wall Street Journal claims that McDonald’s will be “overhauling a number of its China-based stores” in Beijing, Shanghai, Guangzhou and other cities in an effort to attract more customers as China’s economy continues to slow down.
In China, McDonald’s is a more upscale choice for diners than it may be in the United States or Europe. In February, the last month for which numbers are available, same-store sales in the company’s Asia Pacific, Middle East and Africa (APMEA) region rose 5.4%. Partly the gain was due to timing of the Lunar New Year holiday, but that level of growth is critical when U.S. same-store sales fell 3.3% in February and European sales rose just 2%.
McDonald’s also recently opened its first store in Vietnam.
Same-store sales in the United States were down 0.2% year-over-year in 2013, flat in Europe and down 1.9% in APMEA. McDonald’s even gave away 5 million Egg McMuffins at 5,000 stores in APMEA to promote its breakfast menu. That will not get the job done.
McDonald’s reports first-quarter earnings next Tuesday, and the company is expected to post earnings per share of $1.24 on revenues of $6.73 billion. Expected earnings are below last year’s level of $1.26, while revenues are expected to rise 2%.
The company’s stock closed at $100.25 a share on Thursday, in a 52-week range of $92.22 to $103.34.
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