July 23 (Bloomberg) -- McDonald’s Corp., the world’s largest restaurant chain, reported a 4.5 percent drop in second-quarter profit, trailing analysts’ projections, as U.S. same- store sales slowed.
Net income fell to $1.35 billion, or $1.32 a share, from $1.41 billion, or $1.35, a year earlier, the Oak Brook, Illinois-based company said today in a statement. Analysts projected $1.38, the average of 26 estimates compiled by Bloomberg.
Chief Executive Officer Don Thompson, who took the helm earlier this month, is struggling to lure budget-conscious Americans with a new extra-value menu. Sales at stores open at least 13 months in the U.S. rose 3.6 percent, the slowest growth in five quarters.
“Overall results reflected the slowing global economy, persistent economic headwinds and the investments we’ve made to enhance restaurant operations,” Thompson said in the statement. July global comparable-store sales are expected to be lower than those in the second quarter, he said.
The company fell 2.2 percent to $89.55 at 8:43 a.m. in New York. The shares had dropped 8.7 percent this year through the close of regular trading on June 20.
The stronger dollar hurt the value of sales from abroad, reducing second-quarter profit by 7 cents a share, according to the statement. McDonald’s gets more than 60 percent of its revenue from outside the U.S.
The U.S. dollar climbed to a two-year high today versus the euro on concerns that Europe’s debt crisis is deepening.
There are “headwinds on both the top and bottom lines,” Chief Financial Officer Peter Bensen said during an investor conference last month. McDonald’s is facing government austerity programs in European nations, higher commodity costs in the U.S. and slowing economic growth in Asia, he said.
Revenue rose less than 1 percent to $6.92 billion in the quarter ended June 30. Analysts estimated $6.96 billion, on average.
McDonald’s comparable-store sales advanced 3.7 percent globally in the quarter, compared with an average estimate for a gain of 2.9 percent, according to Consensus Metrix, a researcher owned by Wayne, New Jersey-based Kaul Advisory Group. That marks the slowest increase in 10 quarters.
Same-store sales increased 3.8 percent in Europe and 0.9 percent in Asia Pacific, the Middle East and Africa, McDonald’s said. Same-store sales are considered an important indicator of growth because they include only older locations.
McDonald’s has more than 33,500 locations worldwide, of which about 20 percent are company operated.
(McDonald’s will hold a conference call at 11 a.m. New York time.)