McDonald's profit slips as same-store sales come in flat


McDonald's (MCD -2.3%) opens lower after reporting a 1% Y/Y drop in Q2 earnings, which also came in below expectations,

Global comparable sales from Q2 were relatively flat vs. expectations of a 0.8% gain, reflecting negative guest traffic in all major segments: Same-store U.S. sales fell 1.5% vs. estimates of a 0.3% decline, reflecting negative comparable guest traffic amid "ongoing broad-based challenges," same-store Europe sales fell 1% vs. expectations for 0.7% growth, and Asia/Pacific same-store sales rose 1.1% vs. estimates for 1.5% growth as China sales remain strong.

Continuing strength in China is questionable following MCD's entanglement in another Chinese food safety scandal; Forbes’ Brian Solomon says, “If, as they have in the past, Chinese customers again spurn fast food chains associated with safety problems, it could negatively impact the earnings for McDonald’s.”

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Comments (7)
  • ComputerBlue
    , contributor
    Comments (1359) | Send Message
     
    Keep buying those shares DGI investors. All is well right? MCD's needs to go on the acquisition front.
    22 Jul 2014, 11:06 AM Reply Like
  • magi48
    , contributor
    Comments (428) | Send Message
     
    At some point, they will bottom out. McDonald's is not going out of business. But they are going through some customer changes in America and Europe.
    22 Jul 2014, 12:44 PM Reply Like
  • DrGarnicus
    , contributor
    Comments (117) | Send Message
     
    MCD will more than likely change some things, cause if they do not, this will only continue. What hurts is that their food, aside from breakfast and fries, is not that great. For the price, too, there are better options available and I think people are realizing that those aren't hamburgers, even if they look as such.

     

    It'll take one heck of a change and upgrade to their menu for them to stop what might be continual bleeding.

     

    Not only that, but they raised their coffee fro $1 to $1.19! HAHA....
    22 Jul 2014, 04:18 PM Reply Like
  • JustNumbersOnaScreen
    , contributor
    Comments (114) | Send Message
     
    In my small town it cost's more to eat at McDonalds than any of our local diners. Subway right across the street has better food and at half the price. I say half the price becuase you need 10 items off the dollar menu to fill you up. Up to a year ago the line to the drive through at our Mcdonalds used to stretch out into the street, and now I maybe see 3 cars at a time.
    22 Jul 2014, 04:37 PM Reply Like
  • James Sands
    , contributor
    Comments (2687) | Send Message
     
    Cigarettes are not good for you, soda isn't good for you, fast food isn't good for you. Long-term companies with direct exposure to these markets are not necessarily the most wise investments. Nothing cataclysmic may change in the near-term for these businesses based on toady's snapshot, but there are much better investments for really long-term investors with 25+ time horizons.

     

    I don't short stocks ever, and my portfolio does not hold companies with direct exposure to any of these markets.

     

    I agree with cost posts above as well. Our household buys 90% of our food from markets and grocery stores. On average when the occasional fast food order does take place, for two people it is sometimes close to 20% of our weekly 7-day grocery shopping bill.

     

    We can pretty easily break our number of regular meals down to 3/day or 21/week (not including snacks). Excluding breakfast this comes to 2/day or 14/week for an equivalent comparison. 5 fast food meals are the equivalent of 14 home-made meals from a cost perspective. Not to mention the better well-rounded food group and health benefits of home-made cooking (assuming one selects the highest quality foods and has the time to cook each meal).

     

    For us it is definitely more healthy and significantly cheaper to make all of our food. This is especially true when compared against restaurants too.
    22 Jul 2014, 05:16 PM Reply Like
  • DrGarnicus
    , contributor
    Comments (117) | Send Message
     
    Not to mention the health benefits of making your own food! Win-win!!
    22 Jul 2014, 06:07 PM Reply Like
  • ComputerBlue
    , contributor
    Comments (1359) | Send Message
     
    Agree w all of you.
    22 Jul 2014, 08:44 PM Reply Like
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