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McDonald's franchisees expect a fourth-quarter sales drop

A McDonald's restaurant in Dallas.
Scott Mlyn | CNBC
A McDonald's restaurant in Dallas.

It looks like McDonald's is not immune to the restaurant industry's December slump.

In a recent survey by Nomura-Instinet, 22 domestic Golden Arches' franchisees, who own about 168 stores collectively, estimated that same-store sales had declined 1.2 percent in the fourth quarter.

Here is how the franchisees' estimates break down by geographic zone for the fourth quarter:

Based on these results, Mark Kalinowski, a Nomura-Instinet analyst, lowered his same-store sales estimate by 70 basis points to be down 1.2 percent. He noted that consensus for the quarter is for sales to be down 1.4 percent.

"An adverse December (partially if not wholly due to weather) is to blame," Kalinowski wrote in a research note Wednesday.

Earlier this month, Kalinowski said December is slated to be the only month where the industry as a whole showed negative same-store sales growth. However, he noted that November sales, which were the second-best month for U.S. chain restaurant same-store sales during 2016, "should prevent Q4 as a whole from being a disaster."

It seems that December wasn't the only month affected by adverse weather. Kalinowski noted that he expects January same-store sales will also be poor because of these conditions.

Nomura-Instinent polled the same domestic franchisees about the first quarter of 2017 and, in aggregate, they expect sales to be down 1.9 percent.

Here is how the franchisees' estimates break down by geographic zone for the first quarter 2017:

Kalinowski cut his same-store sales estimate by 240 basis points to an expected 1.9 percent drop. He noted that consensus for the quarter is for sales to be down 0.6 percent.

"In addition, we want to be mindful that Q1 2017 contains one less day in it than Q1 2016 did for McDonald's, as it laps February 2016's leap day — this factor should hamper McDonald's Q1 2017 same-store sales by about a full percentage point," Kalinowski wrote.