McDonald's sales fall for first time in 6 quarters
- by Leland Aguilar
- in Entertaiment
- — Jan 25, 2017
Shares of fast-food giant McDonald's (MCD) fell Monday morning after the company announced its first comparable-store sales decline in six quarters. That growth could come from technology, such as touchscreen ordering and mobile ordering.
One challenge in the U.S. market has been low food prices, which fell 2.2 percent in 2016, according to official figures, pressuring all restaurants. It hasn't said when it expects that process to be completed.
Other test programs include a pilot project at home delivery in the state of Florida as well as a customer loyalty program, executives said on a conference call with analysts.
"So you'll have seen at the start of this year that we have an aggressive McCafe beverage value offer, which is $1 any size coffee or $2 on the small specialty McCafe beverages".
"It's been encouraging how that has resonated with customers as we've entered the new year", Easterbrook said.
Across the pond the all-day McDonald's breakfast has been a thing since 2015 and our hopes were high that it would be rolled out in the United Kingdom too.
The company only discloses changes in customer counts with year-end results, and not on a quarterly basis.
Those digital enhancements, alongside new products or promotions and more of a focus on the chain's McCafe brand are some of the keys to reinvigorating USA same-store sales growth, according to UBS analysts Dennis Geiger and Lauren Silberman.
Profit was $1.44 a share in the period, the Oak Brook, Illinois-based company said in a statement on Monday.
While total global sales grew in the fourth quarter and full year, menu changes have eaten into growth.
Revenue fell 5 percent to $6.03 billion, due to costs related to McDonald's ongoing effort to refranchise thousands of restaurants, or sell corporate restaurants to franchisees, which reduces the company's costs and liability.
"As we begin the first quarter of 2017, we are mindful of the comparison we face against first quarter 2016 results, which benefited from leap year, favorable weather and continued momentum from All-Day Breakfast in the USA", he said. Same-store sales are a key gauge of a restaurant company's health because they strip out the benefit of newly opened stores.
"We're really investing front of house to put more choice and control in the hands of customers, how they're served, how they pay", said chief executive Steve Easterbrook said.
