McDonald’s Corp reported drops in sales in restaurants globally in August, the firth of such monthly slumps since Don Thompson, CEO took over in 2012 July. In premarket trading, the restaurant’s shares fell almost 1%.
On Tuesday, the company said that global sales at restaurants open for about 13 months dropped 3.7% in August.
Reuters reported that analysts had expected a sales drop of 3.1%, according to Consensus Metrix research.
In the US, the sales for the restaurant dropped 2.8%. Monthly sales for the restaurant have been on a low in the US from Nov 2013.
Thompson has been in office at a period when McDonald’s is experiencing disappointing performance from the US because of competition from other burger chains like Wendy’s Co. and Burger King Worldwide Inc. In addition, internal missteps are causing poor results.
According to Fortune, McDonald’s performance in Asia was worse as a scandal involving food safety hit the restaurant in July. There was a 25% drop in sales in Japan, due to the scandal, and a big decline in sales in China through to August.
OSI Group, the Chinese subsidiary of the restaurants largest supplier of meat was fined for the sale of expired meat to Yum Brands’, KFC, McDonald’s and other chains. Following this ordeal, McDonald’s had a short supply of chicken and beef for around three weeks.
McDonald’s reported that the problem in China might lower its Q3 profit by around 15-20 cents a share, which is $196 million. The restaurant is putting in extra work to win over some of the customers.
Despite McDonald’s restaurants closing in Russia, Europe was brighter but the company reported “weak consumer sentiment†in Europe, which will affect the profit and sales for Q3. On Monday, shares for McDonald’s closed at $92.50 on New York Stock Exchange.
To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Yashu Gola at yashu@forexminute.com
