Fast food giant McDonald’s is to announce a turnaround plan in two weeks as sinking US sales dragged down profits again in the first quarter. The ubiquitous burger and fries chain on Wednesday said US sales, the largest share of global income, fell 2.6 per cent from a year ago for comparable outlets. Sales in the Asia Pacific and Middle East region dropped 8.3 per cent, helping bring overall global sales down 2.3 per cent, “reflecting negative guest traffic in all segments”, th
e company said.
Total revenue sank 11 per cent to US$5.96 billion (A$7.73 billion) in the quarter to March 31, and net income plunged 32.6 per cent to US$812 million, or 84 cents a share (-31 per cent).
With 36,000 outlets in more than 100 countries, McDonald’s has been under pressure from falling customer traffic and revenues for two years, due to a range of challenges including changing consumer tastes and more agile rivals with ostensibly healthier menus.
In January, Donald Thompson was replaced as CEO after just three years in the job.
Successor president and CEO, Steve Easterbrook, said on Wednesday that the company is working to address the challenges, including closing under performing restaurants and revising and simplifying menus.
“McDonald’s management team is keenly focused on acting more quickly to better address today’s consumer needs, expectations, and the competitive marketplace,” he said in a statement.
“We are developing a turnaround plan to improve our performance and deliver enduring profitable growth. We look forward to sharing the initial details of this plan on May 4, 2015.”
The results came in below analyst expectations: revenues missed slightly while earnings per share, adjusted to exclude special items, came in at US$1.01, compared to US$1.06 expected.
AFP
