News

McDonald’s U.S. and global sales continue to slide

September 9, 2014

McDonald's today announced that global comparable sales decreased 3.7 percent in August.  Performance by segment was as follows:

• U.S. down 2.8 percent;
• Europe down  0.7 percent;
• Asia/Pacific, Middle East and Africa down 14.5 percent.

CEO Don Thompson said there were "several headwinds" that impacted the chain’s global sales performance during August.

"As a system, we are diligently working to effectively navigate the current market conditions to regain momentum.  For the long term, we remain focused on strengthening the key foundational elements of our service, operations and marketing to maximize the impact of our strategic growth priorities for our customers and our business," he said in a news release.

The US performance was impacted by sluggish industry growth and a highly competitive marketplace, the company said. The brand is "addressing its service, value and menu opportunities to enhance customer service and loyalty."

Soft topline results are expect to affect the US system’s margin performance in Q3.

Europe experienced a positive performance in the UK, but it was more than offset by weak performance in Russia. The Russian government has closed a handful of McDonald’s restaurants in the country throughout the summer, citing food safety violations. However, many analysts say the closures are part of the ongoing tension between Russia and the US. 

The company expects sales and profitability to be impacted during Q3 due to weak consumer sentiment in Europe, especially in predominantly company-operated markets.

APMEA’s 14.5-percent drop was the result of the supply chain issue in China, in which a McDonald’s supplier was caught picking meat up off the floor and mixing expired meat with fresh meat.

"APMEA is in the process of undertaking recovery strategies in order to restore customers' trust and confidence," the company said in the release.

The China supplier issue is predicted to impact Q3 earnings by as much as 15 to 20 cents per share.