McDonald’s quarterly profit falls 13 percent

In the statement, CEO Steve Easterbrook said: “We have made meaningful progress since announcing the initial steps of McDonald’s turnaround plan in early May”.

“To position the business for long-term growth, we’ve undergone significant organizational change and are streamlining our global resources to improve our efficiency and effectiveness, ” Easterbrook said”.

As of this writing, shares of McDonald’s were up 1.46% at $99 per share in premarket trades. “While our second quarter results were disappointing, we are seeing early signs of momentum”. McDonald’s has struggled with changing US consumer tastes, a bloated menu and slow service times.

Analysts on average had expected same-restaurant sales to fall 0.4 percent, according to research firm Consensus Metrix.

Total revenues for the quarter decreased 10 percent or grew 1 percent in constant currencies, to $6.50 billion from $7.18 billion in the same quarter last year, but topped twenty Wall Street analysts’ consensus estimate of $6.45 billion.

In Europe, same-store sales at McDonald’s increased 1.2 percent as “solid performance” in the United Kingdom and Germany offset negative results in France. 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. Analysts had projected $6.43 billion. When considering if perhaps the stock is under or overvalued, the average price target is $101.80 which is 4.3% above where the stock closed yesterday.

The company is still facing a tough challenge in its home market, where same-store sales have declined for seven straight quarters.

Net income fell 13 percent to $1.2 billion, or .26 per share, from $1.4 billion or .40 per share, in the same period a year ago. McDonald’s menu includes hamburgers and cheeseburgers, Big Mac, Quarter Pounder with Cheese, Filet-O-Fish, several chicken sandwiches, Chicken McNuggets, wraps, french fries, salads, oatmeal, shakes, McFlurry desserts, sundaes, soft serve cones, pies, soft drinks, coffee, McCafé beverages and other beverages.

McDonald’s said customer visits slipped as promotions failed to live up to expectations.

But McDonald’s still has a long way to go.

In the past year, McDonald’s restaurants in the US have sold less-characteristic fare, including mini bundt cakes, grits, chorizo burritos and a variety of muffin flavors.

The company also is testing serving breakfast all-day, something customers have requested for many years.

To adapt, McDonald’s is looking at ways to make its menu more flexible, such as serving popular breakfast items all day and letting people build their own burgers by tapping a touchscreen.