McDonald's Reports Weak U.S. Sales

By Chelsey Dulaney 

McDonald's Corp. reported second-quarter profit and revenue that fell less-than-expected, though its U.S. sales dropped below estimates as traffic remained depressed and its efforts to draw in customers fell flat.

Chief Executive Steve Easterbrook, nearly five months into the job, called the results "disappointing," but said the company is "seeing early signs of momentum."

Shares of McDonald's, virtually flat over the past three months, fell 0.6% in premarket trading.

"We have made meaningful progress since announcing the initial steps of McDonald's turnaround plan in early May," Mr. Easterbrook said in a news release.

The results come as McDonald's looks to turn itself around after two years of struggles, including changing consumer tastes in America and food-safety issues in Asia.

Mr. Easterbrook has said he is working to turn McDonald's into a "modern, progressive burger company." The company has made a number of moves in recent months, including eliminating antibiotics from chicken, introducing better burgers and customizable options and emphasizing the freshness of its ingredients.

It is also considering offering all-day breakfast nationwide starting in October, The Wall Street Journal reported this week.

Sales at stores open at least 13 months fell 0.7% globally in the latest quarter, worse than the 0.4% analysts polled by Consensus Metrix had expected. In the key U.S. division, same-store sales fell 2%, worse than the 1.5% drop Consensus Metrix had forecast.

McDonald's said its promotions didn't achieve the expected consumer response.

Overall, McDonald's reported a profit of $1.2 billion, or $1.26 a share, down from $1.39 billion, or $1.40 a share, a year earlier.

Revenue slid 9.5% to $6.5 billion.

Analysts polled By Thomson Reuters had forecast $1.23 a share in earnings and $6.45 billion in revenue.

Write to Chelsey Dulaney at [e-mail]

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