McDonald's comp sales fall 2.2% in November

by Eric Schroeder
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OAK BROOK, ILL. — Global comparable sales at McDonald’s Corp. fell 2.2% in November, dragged down by sluggish results in each of the company’s major geographic segments.

“Today’s consumers increasingly demand more choice, convenience and value in their dining-out experience,” said Don Thompson, president and chief executive officer of McDonald’s. “We are working to bring the McDonald’s `Experience of the Future’ to life for our customers to better deliver against these evolving expectations. Each of our geographic segments is focused on regaining business momentum by prioritizing initiatives to improve comparable sales performance in the near-term, while developing innovations to deliver sustained profitable growth through McDonald’s ‘Experience of the Future.’ ”

In the United States, comparable sales decreased 4.6% amid strong competitive activity. To restore momentum, McDonald’s said it is “diligently working” to enhance its marketing, simplify the menu and implement a more locally-driven organizational structure to increase relevance with consumers.

In Europe, comparable sales decreased 2% in November as positive performance in the United Kingdom was more than offset by weak results in Russia and negative results in France and Germany.  McDonald’s said it remains focused on providing customers with locally-relevant value and premium menu options, including differentiated beverage and breakfast offerings.

November comparable sales in the APMEA’s region decreased 4%, reflecting the ongoing impact of the supplier issue on performance in Japan and China, partly offset by positive performance in Australia.  Brand recovery campaigns continue in the markets affected by the supplier issue, McDonald’s said. To drive customer traffic and improve performance, McDonald’s said its markets across APMEA are leveraging compelling menu options, value platforms and the segment’s enhanced convenience initiatives.

Strong comparable sales in McDonald’s “Other Countries and Corporate” segment, which includes Latin America and Canada, contributed positively to the company’s global comparable sales performance for the month.

In addition to issuing its sales update, McDonald’s identified several other items expected to negatively impact fourth-quarter results, including:

• Negative top-line performance is expected to significantly pressure company-operated and franchised margins;

• 7c to 10c per share due to the ongoing impact of the supplier issue in China;

• 7c to 9c per share due to strengthening of the U.S. dollar against nearly all foreign currencies; and

• System-wide sales for the month decreased 6%, or were relatively flat in constant currencies.
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