McDonalds sales flat in July

Losing McMentum

McDonald's reported unexpected flat sales in July at established restaurants around the world as diners pulled back amid a tough economy. The company had said it expected global sales at restaurants that have been open at least 13 months to be positive in July, but lower than in the second quarter. Meanwhile, analysts had projected a 2.3% increase, according to Consensus Metrix.

Geographically, same-store sales in the U.S. edged down 0.1%, missing the 2.2% growth estimate, as the promotional activity didn't offset the effects of the sluggish economy. The company also says it faced a tough comparison from a year ago, when it launched the mango pineapple smoothie. In Europe, same-store sales shrank 0.6%, below Consensus Metrix's forecast for a 2.4% climb. Same-restaurant sales from the Asia/Pacific, Middle East and Africa region were down 1.5%, compared with the 1.4% increase analysts had expected.

Positive factors for the month included McDonald's breakfast and McCafe Frappe line-ups, according to the company. However, these factors were not strong enough to bring positive monthly comparable sales. Looking ahead, the company expects to turnaround U.S. sales by "providing a well-balanced combination of value, variety and innovation across the menu."

McDonald's (MCD : NYSE : US$87.53), Net Change: -1.48, % Change: -1.66%, Volume: 13,972,876

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