McDonald's January sales worse than expected

by Erica Shaffer
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McDonald's in Beijing, China
McDonald's weak performance in Asia continues to challenge the fast-food chain.

OAK BROOK, Ill. – McDonald's Corp. global comparable sales declined 1.8 percent in January as poor performance in Asia largely offset improved results in the United States, Europe and the company’s other segments.

The fast-food chain's Asia/Pacific, Middle East and Africa (APMEA) segment continued to struggle as comparable sales dropped 12.6 percent in January. The company attributed the result to "broad-based consumer perception issues in Japan, along with the lingering impact of the supplier issue and a shift in timing of Chinese New Year in China and other markets."

"Brand recovery continues to be a top priority throughout the segment, with emphasis on rebuilding customer trust by strengthening quality and affordability perceptions," the company added.

US comparable sales gained 0.4 percent on positive breakfast daypart performance. However aggressive competitive activity dragged on results. The company said McDonald's US is focused on simplifying its national menu and offering greater choice tailored to local consumer preferences.

Comparable sales in Europe increased 0.5 percent as strong performances in the United Kingdom and Germany were largely offset by weak sales in France and Russia.

"While market dynamics remain challenging in the near term, McDonald's Europe is focused on driving sales and guest traffic by strengthening local value platforms, highlighting the quality of core and premium products and aggressively pursuing growth opportunities, particularly at breakfast," the company said.

Strong comparable sales in McDonald's Other Countries & Corporate segment, which includes Latin America and Canada, contributed positively to global comparable sales for the month, the company added.

McDonald's has struggled to regain momentum among consumers in the US and abroad. The company said its recent front-office reshuffle will enable the company to accelerate the pace of change during 2015 and "elevate the overall McDonald's experience in the eyes of its consumers."

Steve Easterbrook will become president and CEO of McDonald’s on March 1. He will replace Don Thompson, who is stepping down from his roles as president and CEO and a member of the company’s board of directors. Easterbrook will take Thompson's position on the board.

"While the company's January performance reflects current business challenges, McDonald's structure and competitive strengths will provide the capability to change the trajectory of the business over the long term," the company said.

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