McDonald's Same-Store Sales Soft in U.S., but Still Strong Globally -- 2nd Update
January 23 2017 - 3:30PM
Dow Jones News
By Julie Jargon
McDonald's Corp.'s global sales in 2016 were the strongest in
five years, but the burger giant's key U.S. market is still
struggling.
Chief Executive Steve Easterbrook said he would focus on
attracting more customers this year after two years replacing
managers, reducing spending and selling restaurants to
franchisees.
"We've got to be serving more customers more often," he told
investors on Monday. He said he would offer more specifics on how
McDonald's planned to find more customers in the U.S. at an
investor meeting in March.
One plan will be rolling out more "experience of the future"
kiosks that allow people to customize their orders and select table
service. The self-ordering kiosks are already popular in Europe.
Mr. Easterbrook said McDonald's will also offer more value
promotions such as $1 coffees.
McDonald's global same-store sales increased 2.7% in the quarter
that ended in December, well above the 1.4% increase anticipated by
analysts in a Consensus Metrix survey. Same-store sales fell 1.3%
in the U.S., in line with expectations, compared with a
year-earlier quarter that included the popular launch of an all-day
breakfast menu.
Mr. Easterbrook said the company's performance in the first
three months of this year will also fare poorly against early
enthusiasm for those breakfast items last year. The company won't
provide guidance for the year until its investor meeting in
March.
McDonald's recently struck a deal for investors to take over
operations of its restaurants in China and said it is inviting bids
for a stake in its Japan unit, part of a long-term goal to have 95%
of its stores run by franchisees. The company said it would provide
more details in March about remaining markets where it expects to
transfer ownership to franchisees.
Fourth-quarter revenue from franchised restaurants rose 3% as
sales from company-operated restaurants declined 9%. Overall,
revenue fell 5% to $6.03 billion, which the company said was due to
selling more restaurants to franchisees.
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. Analysts polled by Thomson Reuters had expected $1.41
a share on $5.99 billion in revenue.
Joshua Jamerson contributed to this article.
Write to Julie Jargon at julie.jargon@wsj.com
(END) Dow Jones Newswires
January 23, 2017 15:15 ET (20:15 GMT)
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