McDonald’s sales fall first time since 2003

Ba da ba ba ba….not lovin’ it.

McDonald’s reported its October sales, seeing the number fall for the first time since 2003. Globally, sales fell 1.8%, versus the average analyst estimate of a 1.08% decrease, with the U.S. seeing a decline of 2.2%, Asia/Pacific, Middle East and Africa falling 2.4% and European sales sliding 2.2% with strength in the U.K. preventing further erosion.

Management pointed to “heightened competitive activity” in the U.S. as a reason for the decline, but many analysts are questioning the company’s execution. Burger King (BKI) and Wendy’s (WEN) have both seen sales on the rise in recent months, benefitting from premium menu offerings and updated stores, plucking customers from the golden arches.

However, one analyst notes that U.S. macro-economic data improved over the month, while McDonald’s sales still fell, suggesting execution issues. Another analyst noted that management hasn’t done much to address the shortfall, and that it seems there is a lack of urgency on the company’s behalf to right the ship.

It appears McDonald’s in a relatively tough spot, and we here at the Morning Coffee would also like to note that we are still three months away from the Shamrock Shake.

McDonald's (MCD : NYSE : US$85.13), Net Change: -1.73, % Change: -1.99%, Volume: 11,358,705

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Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

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