McDonald’s Comparable Sales Decline in May
On June 8, 2015, McDonald’s Corp. (NYSE/MCD) announced that global comparable sales decreased 0.3% in May. However, global sales edged in above expectations. (Source: McDonald’s, June 8, 2015.)
McDonald’s is the world’s leading global food service retailer with over 36,000 locations serving approximately 69 million customers in over 100 countries each day. More than 80% of McDonald’s restaurants worldwide are owned and operated by independent local business men and women. McDonald’s operates in four segments: U.S.; Europe; Asia/Pacific; Middle East and Africa (APMEA) and Other Countries & Corporate (OCC), including Canada; and Latin America and Corporate. McDonald’s market cap is 91.58B.
Global Sales Breakdown
According to McDonald’s financial report, U.S. sales decreased 2.2% in May, reflecting lower consumer traffic and higher competition. McDonald’s major competitors in U.S are Starbucks Corporation (NASDAQ/SBUX), Yum! Brands, Inc. (NYSE/ YUM), and Chipotle Mexican Grill, Inc. (NYSE/CMG).
In Europe, McDonald’s same-store sales were up by 2.3% in May. The food chain had strong results in the U.K.and slightly positive performance inGermany and France. Overall sales in the Europe region were impacted by negative results inRussia.
In APMEA, McDonald’s sales declined 3.2% in May; with challenges in Japan and negative performance in China remaining in the fast food chain industry. Meanwhile, sales in Australia were strong.
In Latin America, Canada, Corporate and other countries, McDonald’s comparables sales were also strong.
On Monday, June 8, 2015, McDonald’s shares rose 0.6% to $96.14 in early trading after the results were released. Year-to-date, the stock is up around two percent.
McDonald’s Turnaround Plan
“McDonald’s has embarked on a turnaround plan to reignite our business performance,” says Steve Easterbrook, President and Chief Executive Officer. He also added: “Our goal is to be a modern, progressive burger company that is responsive to consumers’ evolving preferences, provides a contemporary experience for our customers and drives long-term value for our system and our shareholders.”
McDonald’s monthly sales report in May will be among its last, as the fast food chain has planned to stop releasing its monthly sales report beginning July 1 of this year.
