McDonald's once again looks to breakfast to solve US sales woes

Key Points
  • McDonald's will rollout new breakfast items to lure back diners to its restaurants. 
  • The company did not provide any further details on what those new menu items would be.
  • In 2015, McDonald's hit a similar slump, and introduced all-day breakfast which lead to an uptick in sales.
Getty Images

McDonald's is once again looking at breakfast to solve its slowing U.S. sales problem.

The company said Tuesday during an earnings conference call that it would be rolling out new breakfast items as well as more national and regional value deals to lure back diners to its restaurants. The company did not provide any further details on what those new items would be.

In the most recent quarter, McDonald's was able to grow its same-store sales despite a decline in traffic because of a 2 percent rise in menu prices and customers spending more at its self-order kiosks and on delivery. However, longer-term, the Golden Arches has to find a way to boost traffic, Kevin Ozan, McDonald's chief financial officer, said on the call.

In 2015, McDonald's hit a similar slump, as competition from rivals such as Chipotle Mexican Grill and Shake Shack dented sales and traffic. The company introduced All-Day Breakfast in October of that year to attract more diners and the move helped it see an uptick in sales.

Since its launch, McDonald's has seen 13 consecutive quarters of positive same-store sales growth.

The need for more menu innovation comes as McDonald's has struggled to boost revenue and earnings fast enough to quell uneasy franchisees. The company has been refurbishing restaurants and adding other upgrades such as self-order kiosks. It has invested more than $1 billion this year. However, the return on investment isn't being realized in the near-term, a complaint voiced by some 400 of its U.S. restaurant operators — about a quarter of its total franchises — who met earlier this month in Tampa, Florida.

Turning to new products is a common tactic in the restaurant business. McDonald's has already begun rolling out fresh beef hamburgers and new coffee drinks to lure new customers.

"We want to do better at breakfast," Steve Easterbrook, CEO of McDonald's, said on the earnings call Tuesday.

"We've got some initiatives in place, which we are going see out through the next few months, and also some new food news, which we think will reenergize the daypart," he said, referring to the morning.

Shares of the company were up about 6 percent in trading early Tuesday, on pace for its largest percent increase since October 2015.

WATCH: Why McDonald's and Burger King are failing in Vietnam

Why McDonald's and Burger King are failing in Vietnam