McDonald’s sales go stale as revenues drop 10 per cent
Not a good start for new McDonald's chief executive Steve Easterbrook, after the company reported revenues down 10 per cent to $6.5bn (£4.2bn) in the three months to the end of June.
The figures
Global sales fell 0.7 per cent in the quarter, while operating income fell 16 per cent to $1.8bn. Diluted earnings per share also fell 10 per cent, from $1.40 in the second quarter of 2014 to $1.26 this time around.
On a six-month basis, that performance was even worse, with diluted earnings per share falling 20 per cent to $2.61.
The US' performance was particularly disappointing, with sales dropping two per cent – although that was tempered slightly by Europe's 1.2 per cent increase, driven by a "solid performance" in the fast-food loving UK, as well as Germany.
Meanwhile, sales in Asia fell 4.5 per cent.
Why it matters
It's been a tough few quarters for the world's largest fast food chain, as competition from smaller, "foodie" burger joints – as well as other kinds of fast food, like burritos – began to take its toll. Plus, there's consumers' new focus on health to grapple with.
But new boss Easterbrook, who is widely regarded as a "British boy done good", said the company has undergone "significant organisational change", adding that it's seeing "early signs of momentum".
There's hope from China's recovery – although chief financial officer Kevin Ozan added that the turnaround will require a "comprehensive approach to financial management".
What McDonald's said
Easterbrook added:
Looking ahead to third quarter, we expect positive global comparable sales led by growth in our newly-created International Lead Market segment and China's continuing recovery from the 2014 APMEA supplier issue. I am confident that we will create the transformation necessary for McDonald's to become a modern, progressive burger company delivering a contemporary restaurant experience.
In short
The tough times continue for McDonald's – but hopes are high for Easterbrook.