OAK BROOK, Ill., Aug. 8, 2014 /PRNewswire/ -- McDonald's
Corporation today announced that global comparable sales decreased
2.5% in July. Performance by segment was as follows:
- U.S. down 3.2%
- Europe up
0.5%
- Asia/Pacific, Middle
East and Africa (APMEA)
down 7.3%
"McDonald's global growth priorities - providing our customers
with their favorite food and drinks, creating memorable
experiences, offering unparalleled convenience and becoming an even
more trusted brand - are the foundation of our customer-centric
approach to building our business for the long term," said
McDonald's President and Chief Executive Officer Don Thompson. "Although July's results
were not in-line with McDonald's expectations, we intend to
strengthen our performance by addressing the current business
headwinds with the discipline and conviction that inspire our
customers' trust and loyalty."
In July, U.S. comparable sales decreased 3.2% amid continuing
broad-based challenges. During the month, the U.S. featured
core favorites in conjunction with McDonald's global World Cup
sponsorship and promoted premium beef and chicken options as the
segment lapped a prior year Monopoly event. McDonald's U.S.
remains focused on enhancing its customer relevance and appeal
through service, value and menu initiatives.
Europe's comparable sales rose
0.5% in July led by positive performance in France and the U.K., partly offset by negative
performance in Germany and
Russia. McDonald's
Europe is taking a holistic
approach to building customer demand with a combination of
compelling limited-time menu choices and expansion of the breakfast
daypart and blended-ice beverages.
In July, APMEA's comparable sales decreased 7.3% reflecting the
impact of food quality and safety issues at a supplier to
McDonald's and other food companies in China. As a
consequence, results in China,
Japan and certain other markets
experienced a significant negative impact. The affected
markets represent approximately 10% of global systemwide sales and
negatively impacted the segment's July comparable sales by over 700
basis points. Going forward, McDonald's is undertaking
recovery strategies to restore customers' trust and confidence.
In the Form 8-K dated July 22,
2014, the Company indicated that full year 2014 global
comparable sales were expected to be relatively similar to
year-to-date June performance (i.e. relatively flat) given a
stagnant IEO category, sustained competitive activity, consumer
price sensitivity and cost pressures. However, as a result of
the China supplier issue, the
Company's global comparable sales forecast for 2014 is now at
risk.
Systemwide sales for the month decreased 0.5%, or 0.0% in
constant currencies.
Percent
Increase/(Decrease)
|
|
Comparable
Sales
|
|
Systemwide
Sales
|
|
|
|
|
As
|
|
Constant
|
Month ended July
31,
|
|
2014
|
|
2013
|
|
Reported
|
|
Currency
|
McDonald's
Corporation
|
|
(2.5)
|
|
0.7
|
|
(0.5)
|
|
0.0
|
Major
Segments:
|
|
|
|
|
|
|
|
|
U.S.
|
|
(3.2)
|
|
1.6
|
|
(2.2)
|
|
(2.2)
|
Europe
|
|
0.5
|
|
(1.9)
|
|
6.9
|
|
3.3
|
APMEA
|
|
(7.3)
|
|
(1.9)
|
|
(2.8)
|
|
(2.9)
|
|
|
|
|
|
|
|
|
|
Year-To-Date July
31,
|
|
|
|
|
|
|
|
|
McDonald's
Corporation
|
|
(0.2)
|
|
0.1
|
|
0.7
|
|
2.3
|
Major
Segments:
|
|
|
|
|
|
|
|
|
U.S.
|
|
(1.9)
|
|
0.2
|
|
(0.9)
|
|
(0.9)
|
Europe
|
|
0.2
|
|
(0.8)
|
|
6.3
|
|
3.0
|
APMEA
|
|
(0.2)
|
|
(1.9)
|
|
(0.2)
|
|
4.3
|
Definitions
- Comparable sales represent sales at all restaurants, whether
operated by the Company or by franchisees, in operation at least
thirteen months including those temporarily closed. Some of the
reasons restaurants may be temporarily closed include reimaging or
remodeling, rebuilding, road construction and natural disasters.
Comparable sales exclude the impact of currency translation.
Comparable sales are driven by changes in guest counts and average
check, which is affected by changes in pricing and product mix.
Typically, pricing has a greater impact on average check than
product mix. Management reviews the increase or decrease in
comparable sales compared with the same period in the prior year to
assess business trends.
- The number of weekdays and weekend days can impact our reported
comparable sales. In July 2014, this
calendar shift/trading day adjustment consisted of one less Monday
and one more Thursday compared with July
2013. The resulting adjustment varied by area of the world,
ranging from approximately 0.2% to 0.5%. In addition, the timing of
holidays can impact comparable sales.
- Information in constant currency is calculated by translating
current year results at prior year average exchange rates.
Management reviews and analyzes business results excluding the
effect of foreign currency translation and bases incentive
compensation plans on these results because they believe this
better represents the Company's underlying business trends.
- Systemwide sales include sales at all restaurants, whether
operated by the Company or by franchisees. While franchised sales
are not recorded as revenues by the Company, management believes
the information is important in understanding the Company's
financial performance because these sales are the basis on which
the Company calculates and records franchised revenues and are
indicative of the financial health of the franchisee base.
Upcoming Communications
The Company plans to release August
2014 sales information on September
9, 2014.
About McDonald's
McDonald's is the world's leading global foodservice retailer
with over 35,000 locations serving approximately 70 million
customers in over 100 countries each day. More than 80% of
McDonald's restaurants worldwide are owned and operated by
independent local business men and women.
Forward-Looking Statements
This release contains certain forward-looking statements, which
reflect management's expectations regarding future events and
operating performance and speak only as of the date hereof. These
forward-looking statements involve a number of risks and
uncertainties. The factors that could cause actual results to
differ materially from our expectations are detailed in the
Company's filings with the Securities and Exchange Commission, such
as its annual and quarterly reports and current reports on Form
8-K.
SOURCE McDonald's Corporation