McDonald’s Corp. (MCD:US), the largest restaurant chain by sales, posted second-quarter profit that trailed analysts’ estimates after a U.S. sales slump lingered.
Net income (MCD:US) fell less than 1 percent to $1.39 billion, or $1.40 a share, from $1.4 billion, or $1.38, a year earlier, the Oak Brook, Illinois-based company said today in a statement. The average of 24 analysts’ projections compiled by Bloomberg was $1.44 a share. Revenue rose 1.4 percent to $7.18 billion, trailing the estimate for $7.29 billion.
McDonald’s U.S. business faces a crowded field and it has added many new items, slowing down its kitchens. Competitors such as Yum! Brands Inc.’s Taco Bell and Burger King Worldwide Inc. (BKW:US) also are selling more new fare. McDonald’s U.S. same-store sales fell 1.5 percent, compared with a 1.7 percent decline in the previous quarter. Analysts had estimated that the sales would be little changed, according to Consensus Metrix.
The shares (MCD:US) fell 1.5 percent to $97.55 at close yesterday in New York. McDonald’s gained 0.5 percent this year through yesterday’s close, while the Standard & Poor’s 500 Restaurants Index has dropped 0.2 percent.
While McDonald’s has tried advertising free coffee, new bacon Clubhouse sandwiches and Happy Meals, the promotions have failed to boost same-store sales. Comparable-store sales are considered an indicator of a retailer’s growth because they include only established locations.
Meanwhile, Taco Bell’s same-store sales have improved after the chain in March introduced breakfast items nationwide. The Mexican chain also recently began selling a high-protein menu in the U.S.
McDonald’s has more than 35,400 restaurants worldwide and about 19 percent are owned by the company. By 2016, the chain is seeking to franchise as many as 1,500 of its company-owned stores, primarily overseas, it said in a statement in May.
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