Sales Continue Slide at McDonald's

McDonald's french fries
McDonald's french fries

January same-store sales continued to slide at McDonald's Corp. (NYSE: MCD), falling by 1.9% globally during the month. U.S. sales were up 0.9%, but sales in Europe fell 2.1% and sales in the company's Asia/Pacific, Middle East, and Africa (APMEA) region fell 9.5%.

The sharp decline this year exceeded an analysts' projected drop of 1.1% globally, including a drop in U.S. sales of 0.3%, a gain of 0.1% in Europe and a drop of 5.8% in APMEA. Sales in Japan, the company's largest market in Asia, declined by 17%.

The company's CEO noted:

While January's results reflect today's challenging environment and difficult prior year comparisons, I am confident that our unwavering commitment to delivering an exceptional restaurant experience will enhance our brand's relevance and drive long-term results.

In January of 2012, same-store sales rose 7.3% globally over January 2011 sales. That is, indeed, a tough comparison, and the tainted chicken scare in China did not help. Yum! Brands Inc. (NYSE: YUM) and its KFC stores took the brunt of the hit, but McDonald's also felt the impact. The problem is that the impact to both companies is expected to continue well into this year.

Much of the sales drop is already baked into the share price following comments from the company when it reported fourth-quarter results. McDonald's shares are down about 0.2% in premarket trading this morning at $94.40 in a 52-week range of $83.31 to $101.04.

Filed under: 24/7 Wall St. Wire, Food, Retail Tagged: MCD, YUM