McDonald's sales go stale as revenues drop 10 per cent

 
Emma Haslett
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Not a good start for new McDonald's chief executive Steve Easterbrook, after the company reported revenues down 10 per cent to $6.5bn (£4.2bn) in the three months to the end of June.

The figures

Global sales fell 0.7 per cent in the quarter, while operating income fell 16 per cent to $1.8bn. Diluted earnings per share also fell 10 per cent, from $1.40 in the second quarter of 2014 to $1.26 this time around.

On a six-month basis, that performance was even worse, with diluted earnings per share falling 20 per cent to $2.61.

The US' performance was particularly disappointing, with sales dropping two per cent - although that was tempered slightly by Europe's 1.2 per cent increase, driven by a "solid performance" in the fast-food loving UK, as well as Germany.

Meanwhile, sales in Asia fell 4.5 per cent.

Why it matters

It's been a tough few quarters for the world's largest fast food chain, as competition from smaller, "foodie" burger joints - as well as other kinds of fast food, like burritos - began to take its toll. Plus, there's consumers' new focus on health to grapple with.

But new boss Easterbrook, who is widely regarded as a "British boy done good", said the company has undergone "significant organisational change", adding that it's seeing "early signs of momentum".

There's hope from China's recovery - although chief financial officer Kevin Ozan added that the turnaround will require a "comprehensive approach to financial management".

What McDonald's said

Easterbrook added:

Looking ahead to third quarter, we expect positive global comparable sales led by growth in our newly-created International Lead Market segment and China's continuing recovery from the 2014 APMEA supplier issue. I am confident that we will create the transformation necessary for McDonald's to become a modern, progressive burger company delivering a contemporary restaurant experience.

In short

The tough times continue for McDonald's - but hopes are high for Easterbrook.