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McDonald's profit falls on weak US, Europe sales

McDonald's reported a lower-than-expected quarterly profit as comparable sales in its struggling U.S. business fell for the third straight quarter and sales in Europe declined for the first time in four quarters.

McDonald's shares fell 2.4 percent in early trading, after the company also said global comparable sales were expected to fall in July.

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U.S. sales at restaurants open at least 13 months fell 1.5 percent in the second quarter ended June 30 as the company battled resurgent rivals such as Wendy's and Burger King Worldwide.

Analysts had expected McDonald's U.S. comparable sales to fall 0.3 percent, according to research firm Consensus Metrix.

The U.S. business accounts for 30 percent of the fast food chain's overall revenue.

McDonald's U.S. comparable sales fell 3.5 percent in June and 1 percent in May.

Total sales rose 1 percent to $7.18 billion, missing the average analyst estimate of $7.29 billion, according to Thomson Reuters I/B/E/S.

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The world's biggest restaurant chain by revenue said global comparable sales were "relatively flat."

Analysts polled by Consensus Metrix had expected global comparable sales to grow 0.8 percent.

Comparable sales in Europe fell 1 percent, while those in the Asia Pacific region, the Middle East and Africa rose 1.1 percent combined.

McDonald reported net income of $1.39 billion, or $1.40 per share, in the quarter compared with $1.40 billion, or $1.38 per share, a year earlier.

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Analysts on average had expected a profit of $1.44 per share.

McDonald's shares were trading at $95.38 shortly after the opening on the New Stock Exchange on Tuesday. (Click here to track its shares following the report.)

By Reuters

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