McDonald’s Profit Little Changed
Chicago — McDonald’s Corp., the world’s largest restaurant chain by sales, posted first-quarter profit that was little changed as same-store sales dropped in the United States for the first time since 2003 amid soft global demand.
Net income was about $1.27 billion, or $1.26 share, compared with $1.27 billion, or $1.23, a year earlier, the Oak Brook, Ill.-based company said in a statement Friday. Analysts projected $1.26, the average of 29 estimates compiled by Bloomberg.
While Chief Executive Officer Don Thompson has tried to lure diners from competitors by advertising its dollar menu in the U.S., its domestic comparable-store sales fell for the first time in 10 years. Global sales at locations open at least 13 months fell 1 percent in the quarter, driven by a 1.2 percent U.S. decline. Analysts projected a 1.1 percent drop for both worldwide and in the U.S., the average of 25 estimates compiled by Consensus Metrix.
“They need more new product news,” Jack Russo, a St. Louis-based analyst at Edward Jones & Co., said in a phone interview. “Wendy’s is a better competitor than they used to be, Burger King is a better competitor than it has been, and Taco Bell is back — you’ve got some good competition here in the states.”
McDonald’s fell 2 percent to $99.92 at the close in New York, the biggest drop since Nov. 8. The shares have gained 13 percent this year, while the Standard & Poor’s 500 Index has advanced 9 percent.
U.S. restaurant chains, including McDonald’s, are vying to attract diners with the most exciting new menu item as consumer confidence wanes. The Big Mac seller this year began selling Fish McBites and sweet-chili chicken wraps. On April 22, it will introduce a 250-calorie egg-white breakfast sandwich.