By Annie Gasparro
McDonald's Corp. key sales measure for its U.S. restaurants
plunged last month, underlining the challenge for new Chief
Executive Steve Easterbrook in turning around the world's largest
fast-food chain.
Sales at McDonald's U.S. restaurants open at least 13 months
fell 4% in February from a year earlier, compared to analysts'
expectation of a 0.7% drop, according to Consensus Metrix.
Globally, the drop in same-store sales was 1.7%, compared to
expectations for a 0.3% decline.
The weak performance capped the tenure of former CEO Don
Thompson, whom Mr. Easterbrook replaced on March 1. The U.S. sales
drop came despite a much-trumpeted marketing campaign designed to
help rejuvenate McDonald's image-including its first Super Bowl
television advertisement in eight years--in which some customers
could pay for meals by performing friendly acts.
McDonald's said its poor performance "reflects the urgent need
to evolve with today's consumers, reset strategic priorities and
restore business momentum." The company aims to reassert itself as
a "modern, progressive burger company" in response to changing
customer needs and preferences, it said-echoing comments Mr.
Easterbrook has made in recent weeks.
McDonald's shares gained about 0.7% in midday trading Monday,
leaving them up more than 10% since Mr. Easterbrook's appointment
was announced on Jan. 28.
McDonald's has struggled for over two years, posting its worst
sales performance in more than a decade, as Americans choose rivals
that seem fresher, and supplier-safety issues in Asia pile on to
its problems.
Mr. Easterbrook already has made a splash, with the company last
week announcing plans to curtail antibiotics use in its U.S.
chicken over the next two years, becoming the biggest restaurant
chain to make such a commitment. Also last week, McDonald's held
what it called a Turnaround Summit for U.S. restaurant franchisees
where executives attempted to boost morale and brainstorm menu
ideas and other ways to win back customers.
Mark Kalinowski, an analyst at Janney Capital Markets who
surveyed McDonald's U.S. franchisees, found that February started
off strong with its Valentine's Day-themed promotion that allowed
select customers to "Pay With Lovin'," getting their meals for free
if they did something heartwarming, like high-five the cashier. But
the poor second half of the month-battered with winter storms in
much of the country-more than offset its early progress.
"While changes are in the works, we cannot identify a near-term
catalyst to spur sales," Sterne Agee analyst Lynne Collier said in
a note to investors.
In Asia, a food-safety scandal with one of its meat suppliers
continues to weigh on sales, and delays at West Coast ports held up
some food shipments. McDonald's same-store sales in its
Asia-Pacific, Middle East and Africa region fell 4.4%, while
analysts had expected a 3.1% decline.
Europe offered a bright spot. McDonald's same-store sales rose
0.7%, topping analysts' expectations, as the U.K. and Germany
helped offset weakness in Russia.
Chelsey Dulaney contributed to this article.
Write to Annie Gasparro at annie.gasparro@wsj.com
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