McDonald's Profit Beats, but Warns of Sales Slump in January
McDonald's reported quarterly earnings and revenue that beat analysts' expectations on Wednesday, but warned that it sees sales lower early in the first quarter.
After the earnings announcement, the company's shares edged lower in pre-market trading. (Click here to see how McDonald's stock is trading before the opening bell following the earnings release.)
The company posted fourth-quarter earnings excluding items of $1.4 billion, or $1.38 per share, up from $1.38 billion, or $1.33 a share, in the year-earlier period.
Revenue increased to $6.95 billion from $6.82 billion a year ago.
Analysts had expected the company to report earnings excluding items of $1.33 a share on $6.89 billion in revenue, according to a consensus estimate from Thomson Reuters.
In the U.S., same-store sales were up 0.3 percent in the quarter, after the company announced plans to have more stores open Christmas Day, and introduce a limited-time offering of its popular McRib sandwich during the month.
But same-store sales in Europe were down 0.6 percent for the quarter and comparable sales in the Asia-Pacific/Mideast/Africa were off 1.7 percent.
The fast-food giant warned that it expects global sales to be lower in January.
"For the near-term we expect top and bottom-line growth to remain pressured, with January's global comparable sales expected to be negative," CEO Don Thompson said in a statement.
The downbeat January forecast reflected the intensifying competition and changing dining habits McDonald's faces. After years of outperforming its rivals, McDonald's recently hit a snag and took a series of steps to bolster slumping sales, such as touting its Dollar Menu and pushing franchisees to stay open on Christmas.
In November, the company ousted the president of its U.S. business after reporting its first monthly sales drop in nearly a decade.
Over the long term, however, McDonald's continues to target total sales growth of 3 percent to 5 percent, Thompson said.
—The Associated Press contributed to this report.
