Golden Arches Sagging at McDonalds
Results from the world's biggest hamburger chain showed that the sluggish US economic recovery as we…Results from the world's biggest hamburger chain showed that the sluggish US economic recovery as well as debt woes and belt tightening in Europe are pinching even the most resilient restaurant operators by forcing diners to pull back on spending for meals away from home.
"We're seeing more markets that are having consumer confidence issues ... It's a little more than a European cold, if you would," McDonald's Chief Executive Officer Don Thompson said on a conference call with analysts. Shares in McDonald's, which has stepped up advertising for its low-priced food to keep customers coming through its doors, fell 2.8% to $89 in afternoon trading July 23 on the New York Stock Exchange.
Total McDonalds revenue edged up to $6.92 billion, from $6.91 billion a year earlier Global sales at restaurants open at least 13 months decelerated during the month of June -- increasing 4.4% versus 7.7% a year earlier. Net income fell 4.5% to $1.35 billion, or $1.32 per share, for the second quarter. The stronger dollar, which lessens the value of sales overseas for US companies, cut seven cents a share from earnings in the latest quarter, the company said. Higher taxes and costs related to a large sales meeting and its Olympics sponsorship also weighed on profits.