McDonald's reported a steeper-than-expected fall at global established restaurants in November, hurt by increased competition in the United States and the effect of a supplier scandal in China.
Shares of the world's largest restaurant chain by revenue were down more than 3 percent in morning trading.
The market will be focusing on the chain's big U.S. same-store sales miss, said R.J. Hottovy, Morningstar senior retail restaurant analyst, told CNBC. Comparable store sales fell 4.6 percent, more than double the predicted 2.1 percent.
Part of the problem is that U.S. consumers have more compelling options, Hottovy said in "Squawk Box" interview.
"It comes at a time when we've seen a lot of traffic pick up at other restaurant chains. Right now it just shows that the brand is failing to resonate with a lot of its consumers, and much more aggressive actions are needed to get back and re-engage with those consumers," he said.
To do that, he said, McDonald's needs to take a look at its entire platform and innovate. He pointed to the company's plan to expand its "Create Your Taste" option as a positive. The initiative allows customers to customize burgers and sandwiches by entering information into a kiosk.
Whether or not McDonald's will be able to execute that expansion remains to be seen, said Hottovy.
"Frankly, the company has had some missteps on execution lately as well, so it really leaves a lot of questions whether they can pull it off," he said.
McDonald's has also suffered from the absence of a "value message" after scaling back its Dollar Menu in cities where it was not economic to sell food at such low prices, David Palmer, managing director at RBC Capital Markets, told "Squawk on the Street." The company is becoming more local in its marketing approach, but it is too soon to tell whether that is working, he said.
The burger chain can also reinvest in its menu by introducing quality ingredients similar to those offered by Chipotle Mexican Grill, Palmer said.
"Quality of food is more important than ever," said Palmer. "Particularly to younger millennial consumers, and McDonald's needs to do something to shore up its perception on quality."
Eventually, McDonald's may have to slow the pace of store openings to focus on growing comparable store sales, he added, noting that the company is spending a lot of money to keep up 2 percent-plus unit growth.
McDonald's worldwide sales at restaurants open at least 13 months fell 2.2 percent last month.
Analysts on average had expected a 1.7 percent decline in worldwide same-restaurant sales, according to Consensus Metrix.
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"Today's consumers increasingly demand more choice, convenience and value in their dining-out experience," McDonald's President and CEO Don Thompson said in a statement. "We are working to bring the McDonald's Experience of the Future to life for our customers to better deliver against these evolving expectations."
Europe's comparable sales fell 2.0 percent in the month, with positive performance in the U.K. more than offset by very weak results in Russia and negative results in France and Germany, the company said.
APMEA's same-sales slid 4.0 percent, hurt by ongoing supply issues in Japan and China.
—Reuters contributed to this report.