McDonald’s plots turnaround as sales continue to slide
New York — McDonald’s plans to unwrap a plan next month that it says will help turn around ongoing sales declines around the world.
The world’s biggest hamburger chain said Wednesday global sales declined 2.3 percent at established locations during the first three months of the year. That included a 2.6 percent drop in the U.S., where it is facing changing tastes and tougher competition.
Already this year, McDonald’s has announced a number of changes in the U.S. including a simplified grilled chicken recipe, curbing the use of antibiotics in chicken, and a pay bump and vacation time for workers at company-owned stores amid ongoing protests over its treatment of workers.
CEO Steve Easterbrook, who stepped into the role just last month, has said in a statement the company is “keenly focused on acting more quickly to better address today’s consumer needs, expectations and the competitive marketplace.” But that push is happening at a time when McDonald’s is facing intensifying pressures.
A day earlier, Chipotle Mexican Grill said its sales rose 10.4 percent at established locations during the quarter, as a pork shortage and bad weather damped results. The chain has been enjoying strong sales growth, with executives saying the company is changing the way people think about fast food.
Taco Bell’s parent company, Yum Brands, said the chain’s sales rose 6 percent during the period. The increase was helped by the introduction of Taco Bell’s breakfast menu, which has repeatedly targeted McDonald’s in its advertising.
Meanwhile, McDonald’s said it plans to share the initial details of its turnaround plan on May 4. For April, the company said it expects sales will decline at stores operating at least 13 months.
The company is struggling in other regions of the world as well. During the first quarter, the unit encompassing Asia, the Middle East and Africa reported an 8.3 percent drop because of weakness in China and ongoing consumer perception issues in Japan.
Sales at established locations dipped 0.6 percent in Europe because of softness in France and Russia.
For the period ended March 31, McDonald’s earned $811.5 million, or 84 cents per share. That compares with $1.2 billion, or $1.21 per share, a year earlier.
Results were weighed down by 17 cents per share in charges. The stronger dollar hurt its results by 9 cents per share.
Stripping out these items, earnings were $1.10 per share. That was more than the $1.05 per share analysts expected, according to Zacks Investment Research.
Shares of McDonald’s Corp. added $2.30, or 2.4 percent, to $97.17 before the market open.
Revenue for the Oak Brook, Illinois-based company declined to $5.96 billion from $6.7 billion. Analysts expected $6.02 billion in revenue.