McDonald's reports lower traffic, higher sales
April 22, 2014
by Monica Watrous
OAK BROOK, Ill. – Customers made fewer trips to McDonald’s Corp. in the past quarter, but the fast-food chain still posted a bump in revenues compared with the prior year.
Severe winter weather and ongoing market challenges led to lower traffic in US restaurants, which reported a 1.7 percent decline in comparable sales during the company’s first quarter.
“At McDonald’s, we aspire to be our customers’ favorite place and way to eat and drink, and our actions are grounded in creating the best overall experience for our customers,” said Don Thompson, president and CEO. “In the near term, we are prioritizing our efforts around those elements of the restaurant experience that are most impactful — offering the best food and beverage options and delivering outstanding service. For the long term, we are focused on more effectively leveraging consumer insights to guide our global growth priorities of optimizing our menu, modernizing the customer experience and broadening accessibility to brand McDonald’s. We are intent on pursuing initiatives that will strengthen our relationship with our customers to reignite our business momentum.”
For the quarter ended March 31, net income declined 5 percent to $1,204,800,000, equal to $1.21 per share on the common stock, which compared with $1,270,200,000, or $1.26 per share, in the same period of the previous year. Earnings declined on the impact of prior-year income tax benefits.
Revenues for the quarter totaled $6,700,300,000, up 1 percent from $6,605,300,000 the year before.
Global comparable sales increased 0.5 percent on higher average check that offset lower guest counts in the United States and Asia/Pacific, Middle East and Africa (APMEA) regions.
In Europe, comparable sales climbed 1.4 percent, as positive performance in the United Kingdom, France and Russia was partially offset by continued weakness in Germany. Limited-time offers, premium products and value items lifted sales in the region.
Comparable sales in APMEA increased 0.8 percent, reflecting a solid quarter for China offsetting weakness in Japan and Australia.
McDonald’s is focused on stabilizing sales in its priority markets of the United States, Germany, Australia and Japan. The company said global comparable sales for April are expected to be modestly positive.
“In today’s dynamic global marketplace, our goal is to ensure that we are evolving to remain a relevant and trusted brand by serving great-tasting, high-quality, affordable food and creating memorable experiences with our brand,” Thompson said. “By leveraging a deeper understanding of what our customers want with the power of our business model, our investments in restaurant capabilities and modernization, and our hard-earned competitive advantages, we will grow McDonald’s business and deliver enduring profitable growth over the long term.”