McDonald's Sales: Worst Month in Over 10 Years
McDonald's had their worst month in sales since March 2003, mostly because of food safety concerns in Asia and several problems in the United States, the company said Friday.
This week, McDonald's announced twice that this year's sales forcecast "is now at risk" to be reduced further.
Sales at McDonald's locations around the globe fell 2.5 percent last month, the company said. Same-store sales fell 3.2 in the United States and fell 7.3 percent in the Asia/Pacific, Middle East and Africa region.
Analysts predicted lower losses. They predicted a 1.1 percent decline overall with a 2.6 percent drop in the United States. They also predicted the Asia/Pacific, Middle East and Africa region to decline by 0.5 percent.
In the last 30 days, McDonald's shares have steadily declined from the $101.07 per share price on July 9 to the $93.55 price on Friday.
After saying its yearly sales forecast may have to come down Monday because of a variety of factors, McDonald's said its 2014 same-store sales forecast will have to come down as well on Friday.
Janney analyst Mark Kalinowski said he predicts McDonald's annual global sales to decline by 0.3 percent. If those numbers are correct, 2014 would mark the company's weakest annual sales performance since 2002, Kalinowski added.
McDonald's said its numbers for July 2014 were likely lower because last July it had a big Monopoly event. This July, McDonald's is promoting premium and chicken sandwiches options that could be turning off diners who are seeking value-priced items. To try and entice some of those value diners, McDonald's is also promoting new dollar menu items, such as the Jalapeno Double burger for $2.
McDonald's rivals have performed better in sales. Burger King just reported its third consecutive quarter of same-store sales growth in the United States and Canada on Aug. 1. On Thursday, Wendy's said its quarterly same-store sales were up by more than 3 percent.
In July, a Chinese food plant that had been supplying products to some McDonald's restaurants in China was forced to shutdown after a TV report showed workers picking up meat off the floor and using expired meat.
Because of this food safety issue, McDonald's said their sales in Asia fell significantly.
McDonald's same-store sales did rise in Europe by 0.5 percent. Analysts had predicted a 0.7 percent decline.
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