McDonald's earnings: Not lovin' it
In many ways, the chain's Q2 earnings bear this out. McDonald's had a 4.8 percent jump in global comparable sales, with a 3.5 percent increase in the US and a 6.9 percent increase in Europe. Earnings per share were $0.98.
Part of the company's strategy has been to draw in downward-drifting consumers with semi-healthy, gourmet-esque offerings like chipotle and honey mustard snack wraps. Interestingly, it has also sold its interest in premium fast food chain Pret A Manger. It seems likely that Pret's potential to compete with McDonald's, combined with the fact that the chain's interest was non-controlling, made the sale seem very attractive.
Although the recession has spurred McDonalds' growth, the strong dollar has seriously undermined its profits. The company experienced $0.09 per share of negative impact from foreign currency translation, and has seen its revenue fall seven percent, to $5.65 billion, from last year's $6.08 billion. This problem is even more pronounced when extrapolated over the first six months of the year, in which the chain's revenues of $10.7 billion represent a drop of over a billion, or eight percent, from last year.