McDonald’s Corp. (NYSE: MCD) Tuesday reported second-quarter same-stores sales that missed analysts’ estimates, raising concerns that the world’s biggest restaurant chain may enter another downturn.
The Oak Brook, Illinois-based company said that same-store sales rose 3.1 percent during the quarter. While analysts from Wall Street had projected a 3.6 percent increase on average. Geographically, same-store sales rose 1.8 percent in the U.S., much lower than analysts’ estimates of 3.2 percent. International sales rose 2.6 percent, matching analysts’ estimate.
McDonald’s shares dropped more than 4 percent in the early trading. The stock had gained 7.8 percent this year.
"We're making steady progress on transforming our business to satisfy the needs of our customers around the world, despite a challenging environment in several key markets," McDonald's President and Chief Executive Officer Steve Easterbrook said in a written statement.
McDonald’s has been trying to attract more customers by promoting its All-Day Breakfast and McPick 2. The company introduced all-day breakfast in October and it helped boost sales in the last quarter. The company said it would make more breakfast options available for all day and it is expected to help boost sales in the next quarter.
The company blamed the lower-than-expected performance on the softening growth in the restaurant industry.
“The overall industry got weaker, and clearly McDonald’s felt some of that,” said Peter Saleh,
an analyst at BTIG LLC in New York. “It was not a great quarter, especially on the U.S. side.”
Net income was $1.09 billion, or $1.25 per share in the quarter. Excluding certain items, earnings were $1.45 a share. Revenue dropped 3.6 percent to $6.26 billion. Analysts had estimated earnings of $1.38 per share on revenues of $6.27 billion.