By Chelsey Dulaney
McDonald's Corp. reported a steeper-than-expected drop in profit
in its first quarter amid foreign-currency impacts and
restructuring charges, though revenue met Wall Street
expectations.
Shares edged up 0.8% in premarket trading.
Sales excluding newly opened or closed stores fell 2.6% in the
U.S. division, as new promotions and products couldn't offset
competitive pressure. Consensus Metrix had forecast a declines of
2.1%.
The results come as the fast-food chain embarks on a turnaround
under new Chief Executive Steve Easterbrook
Mr. Easterbrook took the helm at the fast-food giant in March
and has helped instill confidence in investors--with shares up over
the past three months.
Mr. Easterbrook's moves so far in the U.S. include a plan to
raise wages for McDonald's restaurant workers, an effort to curb
antibiotic use in its chicken, testing of all-day sales of
breakfast items, and the launch of premium chicken sandwiches and
sirloin burgers. The efforts, however, have drawn the ire of some
of the franchisees who run the vast majority of McDonald's
restaurants and question whether they can afford to implement the
plans.
Overall, McDonald's reported a profit of $811.5 million, or 84
cents a share, down from $1.2 billion, or $1.21 a share, a year
earlier. The results included 17 cents per share related to
write-offs and restructuring and 9 cents a share related to foreign
currency.
Revenue fell 11% to $5.96 billion.
Analysts polled by Thomson Reuters had expected earnings of
$1.06 a share on revenue of $5.96 billion.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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