News

McDonald's US struggles deepen in July

August 8, 2014

Investors looking for a sales turnaround at McDonald's will have to wait it out another month. The Golden Arches today reported its U.S. sales fell 3.2 percent in July.

Comparatively, the chain reported a decrease of 1 percent in May and flat sales in April. Sales in the U.S. were down 1.7 percent in Q1, and down 1.5 percent in Q2.

July's sales more reflect those reported in January, when the company reported a decline of 3.3 percent and cited severe winter weather as a main culprit.

In a news release, McDonald's said "continuing broad-based challenges" affected July sales. CEO Don Thompson said July's results were "not in line with expectations."

During the month, the company focused on its core menu offerings in conjunction with its FIFA World Cup sponsorship.

Globally, comp sales were down 2.5 percent in July and were hit especially hard in its Asia/Pacific, Middle East and Africa markets with a 7.3 percent drop. The APMEA business was affected by China's recent supply chain crisis. The company said the affected markets represent approximately 10 percent of global systemwide sales and the supplier new impacted July's comp sales by more than 700 basis points.

The company said it is "undertaking recovery strategies to restore customers' trust and confidence" in China.

Europe was the only market in the black, up 0.5 percent.

"We intend to strengthen our performance by addressing the current business headwinds with the discipline and conviction that inspire our customers' trust and loyalty," Thompson said in the release.