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McDonald’s January sales drop more than expected

A worker drills a hole underneath the McDonald's brand sign at a store of the global fast-food chain in Berlin in this February 15, 2012 file photograph.

THOMAS PETER/REUTERS

McDonald's Corp. said on Friday that January sales at established restaurants around the world fell 1.9 per cent, a steeper decline than expected as fast-food chains fight for diners.

McDonald's warned last month that same-restaurant sales would be down. Analysts polled by Consensus Metrix had expected a decline of 1.1 per cent.

McDonald's expected sales and profit growth to be under pressure in the near term, as diners spend cautiously due to lackluster economic growth in most major markets. At the same time, the leading fast food chain is comparing against strong results from a year ago, including a 6.7 per cent gain in same-restaurant sales in January 2012.

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February comparable sales will be hit by about 3 percentage points because the 2012 period included an extra day due to the leap year, McDonald's said. In February 2012, the sales rose 7.5 per cent.

Comparable sales in Europe, McDonald's top market, declined 2.1 per cent last month, with weakness in Germany and France. Analysts expected an increase of almost 0.1 per cent.

The United States, a close No. 2, posted a 0.9 per cent gain, helped in part by the addition of the Grilled Onion Cheddar burger to its Dollar Menu. U.S. results exceeded analysts' target for a 0.3 per cent decline.

Asia/Pacific, Middle East and Africa (APMEA) turned in a 9.5-per-cent decline, despite strength in Australia – steeper than the 5.8 per cent analysts had anticipated. McDonald's cited continued weakness in Japan and the shift in the timing of the Chinese New Year.

Scares over the safety of China's chicken supply also took a small bite out of McDonald's sales there. Chinese authorities cleared McDonald's and KFC owner Yum Brands Inc of charges they had served chicken laced with excessive chemicals. The U.S. chains, long considered to serve safer and higher quality food than domestic chains, remained under fire from local media and consumers in recent weeks.

McDonald's comparable sales track all company-owned and franchised restaurants open for at least 13 months.

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