McDonald’s Fails to Halt Sales Drop

Analysts were expecting global same-store sales to fall 0.3%.

The decline in APMEA sales is significantly less than the January decline of 12.6%, largely due to the timing of the Chinese New Year. The company noted that consumer perception issues in Japan still weigh on sales. Rebuilding trust in the brand remains a key issue for McDonald’s in APMEA.

Overall system sales declined 8% as reported. On a constant currency basis system, sales rose 0.5% and same-store sales fell 0.3%.

McDonald’s said:

[C]onsumer needs and preferences have changed, and McDonald’s current performance reflects the urgent need to evolve with today’s consumers, reset strategic priorities and restore business momentum. The goal going forward is to be a true destination of choice around the world and reassert McDonald’s as a modern, progressive burger company.

The company’s problems in Asia are directly related to tainted food issues that surfaced in Japan and spread to other parts of Asia. In the United States, the brand has failed to keep up with what consumers now demand — higher-quality food at a reasonable price. In Europe, the company’s difficulties in Russia have offset better sales in both the United Kingdom and Germany.

In premarket trading Monday, McDonald’s shares traded down about 1% to $96.19, in a 52-week range of $87.62 to $103.78.

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