McDonald’s: Growth to Come Even with Sales Decline

Steven Easterbrook the CEO at McDonald’s Corp predicted growth would return to the world’s largest burger chain during the second six months of 2015, giving investors a cause to be optimistic after another three-month period of declining sales.

Global sales at same-stores, which are a measure of stores open a minimum of 13 months, will increase during the three quarter announced Easterbrook on Thursday, the same day the company released earnings results.

Sales were down 0.7% in that measure during the last quarter, which missed estimates on Wall Street.

Though it was expected there would be a rebound during the third quarter, the CEO’s remarks gave comfort, said an analyst on Wall Street.

Easterbrook, a longtime executive at McDonald’s, was moved up to the CEO position in March and currently is directly a plan to turnaround the company, which includes management reorganization, cost cutting and returning more cash to their shareholders.

McDonald’s shares were up 1% in early Thursday trading and the shares are up 4.1% on the year through the end of business on Wednesday.

The company however is still facing great challenges at home, where its sales in same-stores declined for seven consecutive quarters. McDonald’s struggled with changing consumer tastes in the U.S., slow service and a menu that could not be described in any other way than bloated.

The sales drop in the U.S. was 2% for the second quarter, which was worse than the decline of 1.5% predicted by Wall Street. The company put the blame on ineffective products that had been featured as well as on certain promotions.

McDonald’s posted per share earnings of $1.26 in comparison to $1.23 that analysts had predicted. Total revenue was down 9.5% to end the quarter at $6.5 billion, while analysts were expecting $6.43 billion in overall revenue.

Analysts feel that if McDonald’s offers all-day breakfast, which a report on Wednesday indicated it would start in October, then that would help the bottom line but would not be sufficient to turn the company around.

Most feel the company needs the last piece of the puzzle, which they believe is menu innovation that gives the customer the idea that McDonald’s has higher quality food to draw them back into their stores.

 

Latest News

Oracle Buying Textura at a Price of $663 Million
Oracle Buying Textura at a Price of $663 Million
AB InBev Offering More Assets of SABMiller in Europe to Win EU Approval
AB InBev Offering More Assets of SABMiller in Europe to Win EU Approval
Verizon Working With Authorities On Sabotage Incidents
Verizon Working With Authorities On Sabotage Incidents
UPS Profit Increases During First Quarter by 10%
UPS Profit Increases During First Quarter by 10%
FY2016 EPS Estimates for Bank of Marin Bancorp  Lifted by Analyst
FY2016 EPS Estimates for Bank of Marin Bancorp Lifted by Analyst
KeyBanc Equities Analysts Lift Earnings Estimates for Brandywine Realty Trust
KeyBanc Equities Analysts Lift Earnings Estimates for Brandywine Realty Trust


Leave a Reply

 
 
© 2006-2016 The Vista Voice. Subscribe