Easterbrook: McDonald's Q2 results 'disappointing'

by Erica Shaffer
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Steve Easterbrook, CEO, McDonald's
McDonald's CEO Steve Easterbrook said the company has made meaningful progress despite a disappointing second-quarter performance.

OAK BROOK, Ill. – McDonald’s Corp. reported a 13 percent decline in net income for the second quarter ended June 30. Same-store sales in the US slipped 2 percent, while global same-store sales retreated 0.7 percent.

“While our second quarter results were disappointing, we are seeing early signs of momentum. Looking ahead to third quarter, we expect positive global comparable sales led by growth in our newly-created International Lead Market segment and China's continuing recovery from the 2014 APMEA supplier issue,” CEO Steve Easterbrook said in a statement. “I am confident that we will create the transformation necessary for McDonald’s to become a modern, progressive burger company delivering a contemporary restaurant experience.”

Consolidated operating income dropped 16 percent on $45 million in restructuring charges incurred from the company’s global reorganization. Diluted earnings per share sank 10 percent to $1.26.

However, the company has made progress, Easterbrook noted. He said McDonald’s has undergone “significant organizational change” and streamlining to position the company for long-term growth. Kevin Ozan, CFO, said operational growth and a comprehensive approach to financial management will lead McDonald’s turnaround.

“The structural changes we are implementing, coupled with our plan to refranchise about 3,500 restaurants by the end of 2018 and achieve approximately $300 million of net annual savings on selling, general and administrative expenses by the end of 2017, are designed to position us for future growth,” Ozan said in a statement. “We continue to evaluate additional ideas to further drive shareholder value through actions that deliver sustainable long-term growth.”

MEAT+POULTRY.com will be posting additional details of McDonald’s second quarter performance as part of its afternoon e-newsletter.

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