By Chelsey Dulaney
McDonald's Corp. on Friday posted a worse-than-expected 21% drop
in earnings its December quarter, rounding out a dismal year for
the fast-food chain that prompted core changes to its business.
"2014 was a challenging year for McDonald's around the world.
Our results declined as unforeseen events and weak operating
performance pressured results in each of our geographic segments,"
Chief Executive Don Thompson said in a news release. "Our business
continues to face meaningful headwinds."
McDonald's has been working to rejuvenate its business in recent
months after posting some of its worst monthly sales figures in
more than a decade last year.
The company has been losing customers to fast-casual chains and
to such rivals as Five Guys Holdings LLC and Chick-fil-A Inc. that
focus on just a few menu items. McDonald's menu has become bloated
in recent years as the chain has added everything from fruit
smoothies to salads in a bid to appeal to a broad range of
customers. The result has been slower service, which has driven
away many customers.
Mr. Thompson has vowed to fix the problems, announcing plans to
cull menu items and give customers the option of more customized
ordering. Executives also have said the chain plans to study every
ingredient in its products and to review different cooking and
holding techniques to improve the quality of its food.
Overall, McDonald's reported a profit of $1.1 billion, or $1.13
a share, down from $1.4 billion, or $1.40 a share, a year
earlier.
Revenue fell 7.3% to $6.57 billion, as global same-store sales
dropped 0.9%.
Analysts polled by Thomson Reuters had expected earnings of
$1.22 a share on revenue of $6.68 billion.
Same-store sales in its U.S. division fell 1.7%, while sales in
its Europe division fell 1.1%.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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