By Melodie Warner
McDonald's Corp.'s (MCD) global same-store sales rose a slower-than-expected 3.3% in May as austerity measures in Europe pressured the world's largest fast-food chain's results.
Shares were recently trading 2.8% lower at $85.95 premarket as Baird Equity Research was expecting a 4.5% increase in global sales from restaurants open at least 13 months. The stock is down 12% since the beginning of the year, through Thursday's close.
McDonald's has been able to boost guest traffic and sales faster than most of its competitors with its increasingly diverse menu--ranging from value-price offerings to higher-margin products like blended-ice drinks--and its growing global operations. But the hamburger chain has previously warned the global economic climate remains challenging with varying degrees of consumer confidence, economic pressures and inflationary costs. The headwinds also contributed to the company missing April sales-growth estimates.
"Despite the increasingly challenging global economic environment," Chief Executive Jim Skinner said, "I am confident we will continue to deliver long-term sustainable growth."
McDonald's on Friday said May systemwide sales rose 1.2%, or 5.6% in constant currencies.
Same-store sales in the U.S. rose 4.4%, missing the 5% growth estimate from Baird. The company attributed its growth to the launch of its seasonal Blueberry Banana Nut Oatmeal and continuing demand for its breakfast items.
In Europe, same-store sales grew 2.9%, just short of Baird's forecast for a 3% increase, driven by premium menu options, everyday value offerings and the ongoing benefits of reimaging.
The Asia/Pacific, Middle East and Africa region posted a 1.7% decrease, while analysts projected a 2% rise. McDonald's said positive results in Australia were more than offset by negative results in Japan and, to a lesser extent, China.
McDonald's reported in April its first-quarter earnings rose 4.8% as sales grew slightly faster than expected, signaling the company's resilience against broader economic woes.
Write to Melodie Warner at firstname.lastname@example.org