McDonald's Same-Store Sales Soft in U.S., but Still Strong Globally -- Update
January 23 2017 - 11:49AM
Dow Jones News
By Joshua Jamerson
McDonald's Corp. reported soft same-store sales in the U.S. amid
a leveling-off in enthusiasm over its all-day breakfast options,
though world-wide sales were still higher than expected.
For the quarter that ended in December, the burger chain's
global comparable sales increased 2.7%, well above the 1.4%
increase anticipated by analysts in a Consensus Metrix survey.
However, comparable sales fell 1.3% in the U.S.; the company
blamed a challenging comparison to the prior-year launch of its
all-day breakfast service. Investors are hungry for menu news,
since McDonald's hasn't come out with any blockbuster products in a
while.
Shares fell 0.8% to $121.25 in morning trading.
Chief Executive Steve Easterbrook said the company will again
face a difficult comparison for the first three months of the year.
He said the year-ago period benefited from a leap year, good
weather and momentum from all-day breakfast in the U.S.
McDonald's appears to be marching closer toward its goal of
having a more reliable revenue stream from royalties as it
transfers ownership of its many restaurants to independent
operators. The model, which other fast-food chains have been
adopting, lets companies collect a piece of sales without the costs
and headache of managing hundreds of stores.
"I am confident that we're on the right path," Mr. Easterbrook
said in prepared remarks ahead of the company's conference call
with analysts, calling the company more "streamlined and focused."
He noted record franchisee cash flows in many major markets.
Fourth-quarter revenue from franchised restaurants rose 3% as sales
from company-operated restaurants, which makes up a larger chunk of
the top line, declined 9%.
Over all, McDonald's reported net income of $1.19 billion,
compared with $1.21 billion in the year-ago quarter. On a per-share
basis, earnings rose to $1.44 from $1.31, thanks to a lower
outstanding share count.
Revenue fell 5% to $6.03 billion, which the company said was
because of refranchising. Analysts polled by Thomson Reuters had
expected $1.41 a share on $5.99 billion in revenue.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
January 23, 2017 11:34 ET (16:34 GMT)
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