The neighbourhood burger/shake/fry joint that grew into a conglomerate – and ultimately the centre of controversy – was back in the news this week. One of the 30 stocks registered among the Dow Jones’ finest, McDonald’s Corp. (NYSE: MCD) reported balance sheet numbers that investors were not well, lovin’.
Third-quarter revenues at the corporation based in Oak Park, Illinois came in at $7.32 billion (all figures, of course, in U.S. funds), a 2% hike over the $7.15 billion for the same quarter last year. Operating income increased 6% over the same period to $2.46 billion. Net income gained 4.6% to $1.52 billion. On a diluted per-share basis, the number was $1.52, 6% higher than the same quarter last year, coming in a penny better than analysts' average estimate
It was not such a uniformly rosy picture abroad. Europe's comparable sales rose 0.2%. Operating income increased 11% reflecting strong performance in the U.K. and Russia and solid results in France, partially offset by Germany. Comparable sales in Asia/Pacific, Middle East and Africa, however, declined 1.4% for the quarter.
And as such, the pressure was ratcheted up on McDonald’s CEO Don Thompson, who, in his year-plus at the helm, has switched up top management and shaken up menus to boost sales and profits.
One restaurant industry analyst was quoted by CNBC that McDonald’s high-profile McCafe coffee and beverage expansion masked a slowdown in its core business selling hamburgers and french fries, indicating an unwillingness to stick to the core of what the restaurant famous in the first place.
A recent survey from Goldman Sachs suggested that McDonald's, which lately has lagged rivals in introducing popular new menu items, might be losing favour with diners.
The chain known for its "golden arches" is fighting to accelerate sales in the United States after smaller rivals such as Wendy’s (NASDAQ: WEN) and Burger King Worldwide (NYSE: BKW) rolled out new menu items and limited-time offers.
McDonald’s shares have been somewhat inconsistent in the days since the release of the Q3 numbers, closing Thursday’s trading at $94.68 U.S., up 0.5% from the day before, in the middle of a 52-week range from $83.31 to $103.70 U.S.
